Next, our discussion with Unilever turned to quantifying the impact of the company's overall supplier relationship program as well as the Partner to Win summit. I was especially curious about how the program impacts suppliers besides general awards programs (i.e. has Unilever awarded more/less business based on past and relative performance?) In response to this question, Marc suggested, "Everyone is looking for growth. We've indicated with key suppliers where [our] business is going. We've indicated how we need to double our business and how this must happen jointly -- and our focus will be on our top suppliers."
Further, Marc notes, "if suppliers are dealing with us in Europe, we're now building factories in China or India. We are asking them: 'Would you like to come with us to these markets?' We're asking our supply partners to invest in places that we are expanding. We provide support to suppliers that want to make the move to these emerging markets in a sustainable manner. If Unilever works with these suppliers, it makes them more attractive to other clients as well." Marc also points out that Unilever is trying to create greater supply chain transparency with end consumers, linking suppliers to brands -- for example, tying farmers to the end consumer.
Next, our conversation turned to the overall stewardship, management and reporting structure of Unilever's supplier management program. I wanted to understand if the team who manages supply chain CSR/safety/traceability for Unilever was the same group running the general sourcing/supplier management program. Here, Marc shared a basic philosophy that led to a natural structure of the group. Marc suggests the foundation of supplier management is the "base of the pyramid," which is compliance with the law on issues such as maintaining acceptable workplace standards.
This entire area is about compliance and not breaking the law and "for this, Unilever has a separate compliance group" which has regular tie-ins with the broader procurement function and is part of Marc's responsibility. This group of specialists is UK based.
On the other side of the supplier management equation is the "top of the pyramid" -- a role that is pushed back to regular procurement managers. For example, under Marc's team, "If you're a global procurement director for tea and we want a Rainforest Alliance certification for tea, then I want this person to do it ... it is important to raise the supplier management ceiling as part of the day-to-day responsibility of buyers." To help make programs stick, Unilever ties procurement goals directly to variable compensation in such areas as CSR and traceability.
Stay tuned as this discussion continues in the final post in the series.
- Jason Busch