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Contents
Introduction...........................................................................................................................................3
Description of customers.......................................................................................................................4
Expectation of the customers................................................................................................................4
Operations objective 3s (model)........................................................................................................5
Process ought to be operating (different process types)...................................................................7
Process design Diagram.........................................................................................................................7
Description of the process in terms of process designing..................................................................8
4 Vs Model Of Unilever Pakistan Tarnol operations..........................................................................8
How it helps or hinders the operations objectives................................................................................8
What changes you recommend in process............................................................................................9
References...........................................................................................................................................10
Introduction
Unilever Pakistan was introduced to business in Pakistan in 1948. Unilever is the largest Fast
moving consumer goods (FMCG Industry in Pakistan. Unilever PLc London owns 70%
shares in Pakistan. (Unilever, 2014)
Unilever operate through five regional offices and 7 distribution centres as far as sales is
concerned. However the production is made through four wholly owned and six third party
manufacturing sites.
Unilever Pakistan has shown immense growth in Pakistan since its introduction in the
country. Even in the time of global crisis unilever growth rate stayed in the double figures
.Unilever is market leader in most of it s product line which comprises of ‘Home and
personal care, Unilever foods limited (UPFL). Some of the famous brand by unilever is as
follows.
 Walls Ice cream
 Blue Band Margarine
 Brooke Bond tea
 Clear shampoo
 Close up tooth paste
 Rafhan Jelly
 Rafhan Custard
 Surf Excel detergent
 Fair & Lovely Beauty cream
 Lifebuoy soup
 Lux beauty soup
 Rin washing powder
 Rexona beauty soup
 Sunsilk shampoo
 Lipton Tea
 Dalda ghee and cooking oil
 Dove beauty cream
 Dove soup

In total Unilever has more than 1190 SKU’s (Shelf keeping units). Company face fierce
competition with Proctor and Gamble Pakistan.

Unilever has 7 distribution centres all across Pakistan. One of them is Islamabad (Tarnol
Depot) which stands responsible for the delivery of orders sent by 67 distributors in the
northern region. Distributors send the orders directly to the Sales staff. Sales staff sends this
data to the depot in order to make the delivery possible. Unilever has outsourced the
distribution and transportation at the depot level Sarhad Punjab Goods (SPG) transport
company is responsible for providing the warehouse and transportation facility for the Tarnol
depot. Recently unilever ahs introduced SAP in throughout the company. Goods are
manufactured at the factory setu p in various areas and then sent straight to the distribution
centres. Demand planners receive daily record of sales and distribution from each distribution
centre to forecast eh sales and production accordingly. Once the goods arrive at the
distribution centre they are dispatched to various cities as per the orders sent by the customers
to the sales staff. Unilever is facing various socioeconomic challenges in operation, one of
which is to cut the costs due to increasing cost of production due to power shortage in the
country. This makes the cost of operations and hence the price to increase and it puts them on
the negative side of the competition. This not only affects the company itself but also the
overall growth of a developing country like Pakistan. (Memon and Tahir, 2012)

This situation can be turned in to an opportunity as far as competition is concerned, if

unilever is able to keep the cost of operations low, it can earn more profits then the
competition. Due to this the operations productivity has been enhanced but at the same time
it has brought up challenges which we shall discuss in this document. We shall only consider
the depot level operations in this document. Keeping in view the scope of the assignment. In
this document we shall assess the supply chain of Unilever and its integration with marketing.

Description of customers
Customers are the distributors who are appointed by Unilever Pakistan to distribute the
products in the designated area. These customers are required to show a particular amount of
sales and economic strength to increase the business in the area provide. There are three
categories of customers.

1. Restricted supply customers

2. Customers with no supply restrictions
3. VIP customers

Customers in small cities where Unilever sales are low are not in a position to pick huge
loads of supply so they are those humble customers who are required to submit the amount of
sales in advance in the form a cheque with supply order.

Those customers who can buy a stated sum of products each week they are required to submit
a security deposit and in exchange to this they can order unlimited amount of products for a
week depending on the availability . They deposit the money after they receive the products
in instalments.

Third category is those customers who are big distribution centres or giant stores who
purchase directly from unilever warehouse instead of a distributor. Some of the VIP
customers are Metro cash and carry Islamabad, City distributors Islamabad. They are treated
on preference. They are also allocated the stock on priority and their orders can be received
without a time restriction. Rest of the customers need to send their order before three o clock
in the afternoon.

Expectation of the customers

Expectation of the customers if fulfilled can relate to an increase in profits of a company
(Zhu, 2000). Customer expectation varies as per their status explained above. VIP customers
are cash cows and they are responsible for high turnover so their expectation and
requirements are obviously higher than those who are low turnover customers.

VIP customers Limited Customers Unlimited Customers

In time Very High High Very High
delivery
Delivery at Very High Medium High
convenient
time
Maximum Very High High High
stock
allocation
out of
order
Sales staff Very High Medium to low Medium
co-
operation
and
availability
in need.
No delays Very High High High
Quick Very High High Very high
response in
emergency
from
distributio
n centre
and region

Fulfilment of customer satisfaction is the primary goal for any organization. (Morris et al,
1991). Unilever is also striving to fulfil the customer expectations and if possible exceed
them. (Unilever , 2014)

Operations objective 3s (model)

The operations model according to Slack et al (2013) consists of following groups

 Quality
 Speed
 Dependability
 Cost
 Flexibility

Goal achievement describes the performance of a company. According to Enos (2007)

Performance is the achievement of the tangible, Measureable, worthwhile and meaningful
goals..The relative importance of the objectives is describes in the polar diagram below. The
polar diagram below illustrates the relative importance of each of the performance objectives
for these two services. Services from the warehouse and depot co-ordinated effort are highly
important for the customers. This is because only this way they can ensure timely and
adequate delivery of the stock. Cost is the second most important factor that is needed to be
taken care because of the intense market pressure and the profitability requirements of the
distributors as well as the transport company. Dependability is another very important factor
because if the customers are not sure that they shall be provided what they asked for they
cannot plan their operational strategy and hence it is highly important threat they receive

actually what they wanted at the time they were promised and in the quantity they asked for.
This is important because if they receive the wrong delivery they and are out of stock at that
moment they will lose sales and hence will decrease the dependability of the distributors in
front of retailers. So it has financial as well as social repercussions. Flexibility is relatively
less important because once the orders are placed they cannot be changed or replaced. It is an
agreed upon term with the customers and also due to increasing trend and high demand they
can sell the products even if they have mistakenly ordered higher quantity or a wrong
product. Every customer receives three supplies in a week (excluding the restricted supply
customers) so flexibility does not matter that much as the other aspects.

Polar Diagram for Unilever Tarnol Depot (

(Source: Pearsoned, 2014)

In recent times he core production facilities in unilever have not increased productivity as
such but the mergers acquisitions and changes in the processes of transportation and
packaging has increased productivity manifold. (Rossman, 2010)

Quality is also relatively less important thing to worry about at this stage of operations
because the quality of products is the responsibility of the factory and headquarters. At this
stage of operations speed and reliability at affordable cost are the more important.

Some of the operations objectives are as under

 To do the maximum allocation of stock

 Error free allocation and delivery of the stock

 Quick and prompt action on the customer request

g
O
E
y
r
lv
e
d
S
a
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is
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k
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F
C
q
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m
f
R
b
n
ti
h
Ifi
ft
A
.
Q



Accurate feedback to the stakeholders

Decrease the cost of operations

To ensure stock is managed and controlled effectively. 

To decrease the customer complaints and ensure safety of employees.

Process ought to be operating (different process types)

According to Slack et al (2013) all processes consist of input-transformation- output process.

OumaTrIn fotputins
In the case of Unilever Pakistan some of the inputs and operations and outputs are as follows.

Process design Diagram

Process in the depot is simple. Sales staff also takes orders as some special orders are sent
directly to the depot by the customers with the approval of sales staff. Those orders are
entered in to the system till three’ o clock. After three o clock system runs rescheduling
process in which it replenishes stock and allocates the stock depending upon availability
automatically. It also allocates the pallets from which the stock shall be taken. This provides
with two kinds of reports.



Reports and delivery documents for the transportation department
Reports and delivery documents for the warehouse staff which lets them know which
pallets shall be loaded.

Transportation staff allocates the vehicles according to the load and warehouse staff loads it.
Transport Company makes sure the timely delivery and handles the issues with the transport.
Description of the process in terms of process designing

High volume
Handling at three levels Highly repeated
Highly systematic Highly Systemnetic
Low volume High
High Maximum delivery

Huge collection
Too many SKU’z Well defined
Complex allocation Repetitive
Handling at three levels Low volume High Standard
Highly systematic Consistent

Calculated
Routine
Anticipated
Stable
Cyclical High volume Low Low Requirement

Short Shelf Life Larger Quarantine

High monitoring Larger Outdated
Proximity of stock High volume Low High disposal

4 Vs Model Of Unilever Pakistan Tarnol operations

Stock replenishment is a a standard and uniform operation. It is highly technical and care
oriented. With the introduction of SAP most of the work is done automatically however
manual part of the work needs too much care because if there is a mismatch between physical
location of the stock and system location of the stock . It becomes very difficult to transport
large pallets form one location to the other and there is also a possibility of the stock getting
out dated as well as if the location is confirmed by the system but the physical inventory is
not there. It take time in locating and causes delays hence the quality of operation is
deteriorated. If the quality of operations is deteriorated it results in a decreased profits and
growth for the company (Farell, 1957)

How it helps or hinders the operations objectives

Operations have a close linkage with the strategy of the organization and if the operations
objective3s are achieved only then the operations can be called successful. For successful
operations first things that need to be done is the identification of the objectives. If the
objectives are identified correctly then it is easier to devise the strategy and framework for a
successful operations strategy.
In the case we are discussing there are a few obstacles that this operation as a whole faces
almost every day. As the orders are taken by the sales staff and they send them to the region
and they forward it to the Order to cash team who process it. At times if the order is sent
directly it cannot be treated due to policy matter. Duplications of the order also happen if the
staffs who enters the orders forgets to mark it as done. One order is sent to all the data entry
people. And they manually decide who is going to put which order (see order format in
appendix) If for any reason one order is added twice it means that the customer shall receive
double load of delivery and it shall come back which adds in the cost. Another hindrance in
the system is that if there is a damage or wrong stock of if some customer want s to track the
status of the order it becomes really difficult because there are 67 distributors who send
different order every other day and the system of tracking is weak. They have to manually
figure out as which order they are referring to. Performance is not meant the achievement of a
single goal but there are various things that contribute for one goal. (Mohamad and Said,
2010)

For example if there is a query from a customer they normally call on the depot and ask the
data analysts about the status of the stock in a manner “can you please tell me why my surf
excel was not delivered on last Wednesday?” now the data analyst cannot remember each and
every status by heart and there are more than one orders for the same product by the same
customer in a week. And there can be multiple reasons for not delivering .It could be that the
sales staff has adjusted the order to their convenience and as well as there could be shortage
of that particular item on that day. Another reason can be transportation. So the data analyst
has to take number of reports from the system and call various people to know about the
status of the stock to figure out what exactly was the reason for that.

However the introduction of SAP has many positive aspects to discuss as well. It makes sure
that the system allocates the stock on the priority set in the system. And if there is any
scheme on one stock all the customers are interested to lift more of it and they try to take
every measure. When there was no SAP those customers who were at good terms with the
depot staff could get higher allocations but in the presence of the SAP now system allocation
has taken this liberty away which means more justice and transparency in the system. I has
also reduced the pressure of sales staff who would insist on full allocation of the stock to the
particular client they are dealing with. It has also made various kinds of reports that system
generates very easy and LIVE reporting to headquarter is possible as they can login to the
system and take any report regarding the stock level they want.

It also takes less time to allocate the stock and reports are automatically generated deliveries
are printed together and sorted manually to be sent to the transport department. This has
decreased the chances of human error and bias as well as the time taken to generate
management reports and delivery notes as well as invoices. This extra time makes sure that
the stock reaches the customer accurately and timely. Efficiency increase brings the growth in
the company and growth is directly related to the profitability. (Charns et al , 1978)
What changes you recommend in process
According to Kanwal and Ahmad (2009) role perception is very important for the sales
people specially. And role perception is the accuracy to which they understand what is
expected from them to do. After studying the whole order processing process I have come to
a conclusion that despite the introduction of multi billion rupees software SAP there is a flaw
in the order collection process. If this flaw can be removed the accuracy of information and
can be increased by hundred percent. This flaw is the absence of the order number. The order
is collected manually with customers provided with excel sheet formats. They fill those
templates and send it to the concerned territory manager. The territory manager is normally
dealing with three to four customers at a time and the every customers sends two orders (i.e.)
one for UPL ( Unilever Pakistan limited ) and one for Unilever Pakistan food Limited this
makes two order from each customer every day. Without the order number there is every
chance that they get mix up and their tracking becomes increasingly difficult as only
customer code and the amount ordered is the hint. This becomes very difficult for the depot
staff to find the needle from the stack of the hay. If the orders are given a code number in the
following manner .

(Customer code+Date + UPL or UPFL + stock amount)

(50250080+100814+UPL+78) Or 50250080-100814UPL78

This is the information which is required by everyone to know what order was that and it is
easier to track. Instead of giving hints about that. As soon as the order number is quoted all
the information regarding the order is embedded in the order number. This makes it easier for
the customer to tell which order he / she is talking about and also for the respondent who can
put the order number in the system and everything regarding the order is retrieved in seconds.

References
 Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of
decision making units. European Journal of Operational Research, 2, 429-444.

 Farell, M. J. (1957). The Measurement of Productive Efficiency. Journal of Royal

Statistical Society, 120(2), 655-666
 Memon, M.A, Tahir, I. M., (2012) ‘Company Operation Performance Using DEA and
Performance Matrix: Evidence from Pakistan’ International Journal of Business and
Behavioural Sciences Vol. 2, No.2, P. 1-22
 Unilever (2014) [Online] available at:
http://www.unilever.pk/aboutus/introductiontounilever/ [Accessed on 01 August
2014]
 Mohamad, N. H., & said, F. (2010). Measuring thee performance of 100 largest listed
companies in Malaysia. African journal of Business Management 4(13), 3178-3190
 Rossman, P. (2010) ‘what financialization means for food workers’ [online] available:
www.iuf.org/buyoutwatch [Accessed on: 10 August 2014]
 Enos, D. D. (2007). Performance improvement: Making it Happen (Second ed.):
Auerbach
publications, taylor and francis group.
 Zhu, J. (2000). Multi-factor performance measure model with an application to
fortune 500 companies. European Journal of Operational Research, 105-124
 Kanwal, N., Ahmed, S. (2009) ‘ Sales Force Automation And Organization
Profitability: The Case of Unilever And Dalda Companies’  International Review of
Business Research Paper , Vol. 5 No. 4 P. 365‐373
 Pearsoned (2014) [Online ] Availabale at:
http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/17/4472/1144836.cw/
[ accessed on 16 August 2014]
 Slack, N., Jones, A. B., Johnston, R. (2013) ‘Operations Management, Seventh
edition, Pearson Edition Ltd.