Вы находитесь на странице: 1из 48

A Study of Unilever Pakistan Limited;

Supply Chain Networks

(133104) MBA (3.5)


Usman Naeem Khan

THE INSTITUTE OF MANAGEMENT SCIENCES,


LAHORE, PAKISTAN

1
Acknowledgement:
This project has added a major accumulation to my awareness of the theme. I am
very Thankful to Almighty Allah for making it possible for me and also my project
instructor Mr. Saad Jaffery who supported me throughout this research. This
practical work of the organization to understand the worldwide presence as well as
the local presence of the Unilever Company.

2
Executive Summary:
Life would be really easier if the world would stand stagnant, but of course it doesnt. As the
world changes, so need the disciplines whose duty includes helping administrators treat with it?
How worldwide branding allows companies to reach the worldwide market as well as the local
company market through their distribution approaches for this aspects. They capture worldwide
aspects as well as local aspects of reaching the market and showing their customer quality
product to reach the highest level of success and growth is the heart of this project.

Initially, I will clarify the introduction to the topic and the company itself and then the
exploration and discoveries about the companys global situation makes it up. This analysis that
based on the procurement of raw material and packing of products, quality of raw material their
readiness on time, the information about the standard, circulation channels, market and
consumers or customers. A brief assessment is also take in which I highlights the consumer
awareness of local UniLever Company as well as worldwide company brands.

3
Introduction
Unilever Pakistan, one of the most positive consumer goods manufacturer in Pakistan, is now
facing another problem before a completing its exit from stock exchanges. The worldwide
enormous Unilever owns a majority 75% stake in Unilever Pakistan. They publicized and
strategic to purchase back the remaining shares that are registered on stock exchanges in
Pakistan, a move that is associated with Unilevers international strategy of merging its
operations in Asia and Africa. According to bases close to the matter, this delisting process will
help the Company in lowering its rate of investment.

We believe the proposed de-listing of the company (Unilever Pakistan) would, if


approved, be a great tragedy for minority investors, the stock exchanges of Pakistan and the
country overall

They deal in all varieties of products from animal cuisine to foods and cleaners plus other
personal and consumer products. Unilever has its branches in over 80 countries of the world, to
which it extends its massive knowledge and resources. Lever Brothers was a British
Manufacturing Co. created by brothers William Heskesth Lever (1851-1925) and James Darcy
Lever (1854 1916) (its inventor) commences business in England as a Grocer. He established
Lever Brothers Co. in 1885 in England. They capitalized in and successfully promoted a new
soap-making process invented by the chemist William Hough Watson. At the same time
Margarine Unie was established in Nether Land by Simon Van Berg and Anton Jurgens. These
two companies in term of:

Buying raw material


Selling finished goods

Therefore, both companies are losing out money in term of turnover. These problems directed to
think of the mergers in 1930. These two companies merged and renamed the business as
Unilever PLC. The word UNI is taken from Margarine Unie and Lever is taken from Lever
Brothers. Its head sector was established in England and Rotter Dam.

What Unilever is?


Unilever is devoted to gathering the everyday desires of people everywhere. About the world
UniLever foods and home and personal care brands are chosen by many millions of specific
consumers each day. Earning their expectation, expecting their desires and meeting their day-to-
day needs are the responsibilities of UniLever local companies. They convey of their services to
the consumers the finest in brands and both UniLevers international and local expertise.

For more than 70 years Unilever has been providing consumers with value products and services.
UniLever has a collection of global, local and resident brands. Some, such as Bertolli,

4
Dove, Hellmanns, Lipton, Lux, Magnum, Omo and Vaseline, are popular around the world.
Others are the first choice for consumers in specific countries. As traditional structures and
lifestyles around the world are being rapidly converted, Unilever continues to react to
consumer`s present desires and, at the same time, to imagine their future ones.

Our forte lies in the deep understanding we have of resident culture and markets. Unilevers
approach is to focus on research and development and marketing on our top acting brands, that
is, those that are most in demand from consumers. Through our extensive knowledge of
movements identified today, we will continue to develop our brands to meet the needs of our
shoppers tomorrow, feel and smell great.

Unilever Pakistan Limited:


Unilever Pakistan Limited is largest fast moving consumer Products Company in Pakistan.
Unilever Pakistan Limited is a portion of UniLever a worldwide company. Unilever Pakistan
Limited is generating more than 50 trademarks in Pakistan.

Mission Statement:

1. We are the foremost consumer product company in Pakistan, a worldwide with deep
foundation in country.
2. We fascinate and mature high capable people who are motivated, enabled and devoted to
convey double-digit development.
3. We oblige everyday desires of all consumers everywhere for food, sanitation and
splendor through trademarks products and service that convey the best quality and value.
4. We struggle to continue and every simple and innovative business.
5. We use our greater consumer understanding to products breakthrough innovation in
brand and network.
6. Our trademarks capture the hearts of consumer through remaining communication.
7. Through managing a responsive supply chain we maximize value from supplier to
customer.
8. We are representative through our commitment to business ethics, safety, health,
environment and participation in the community.

ORGANIZATION`S HIERARCHY:
These are the following organization`s hierarchy as under;

Board of Directors and Chairman and Chief Executive:

Musharraf Hai
Mr. Robert Zoon
5
Mr.Pervaiz Husain Khan
Mr. Fate Hali W. Vellani
Mr.Irtiza Husain
Mr.Pervaiz Mahboob Malik
Mr.Soomro Mohammad Ibrahim
Mr. Omar H. Karim

Company Secretary:

Mr. Amar Naseer


Auditors:

Messrs. A.F.Ferguson & Co


State Life Building No. 1-C I.I.Chundrigar Road Karachi, Pakistan.

Registered Office:
Avari Plaza. Fatima Jinnah Road, Karachi

Statement of Chairman and Chief-Executive of Unilever Pakistan


Limited:
I am quite persuaded that 2002 is controlled to be a passionate year for us, which is why we
should return on some exciting possibilities it has to offer:

Power of collaboration, based on fact and trust.


Passionate recreation to grow and win
Entertaining environment at work, inspired by creativity culture.
Brands which rank highest in consumers minds and hearts.
System that convert the profile of our business.

The experiment for us is to release our energies to help cultivate our business, and to lead and
deliver the results that we have dedicated ourselves to. I would inspire everyone to believe in and
grasp the Art of Possibility and attention on the Necessity Wins for our business.

6
LITERATURE REVIEW:
Supply Chain Management is a system of services that purchase raw materials, transform them
into intermediate goods and then final products, and deliver the products to customers through a
distribution system. It reserves procurement, manufacturing and distribution (Lee & Billington,
1992, 1995) the simple objective of supply chain management is to improve performance of the
chain to add as much value as possible for the minimum rate possible.

In further words, it aims to connection all the supply chain agents to mutually cooperate within
the firm as a way to maximize throughput in the supply chain and convey the most profits to all
associated parties (Finch 2006). Approval of Supply chain management performs in industries
has gradually increased since the 1980s. A number of explanations are suggested and the concept
is discussed from many perceptions. However Cousins et al., (2006); Sachan and Datta, (2005);
Storey et al., (2006) delivered outstanding analysis on supply chain management works.

Since, this aspect of supply chain management primarily focuses on the purchasing and supply
management functions of industrial buyers, we have classified it elsewhere as the purchasing and
supply perspective of supply chain management (Tan et al., 1999, 1998b). Effective supply chain
management (SCM) has become a potentially valuable way of securing competitive advantage
and improving organizational performance since competition is no longer between organizations,
but among supply chains (Li et al., 2006). Integrated purchasing strategy, integrated logistics,
supplier integration, buyer supplier partnerships, supply base management, strategic supplier
alliances, supply chain synchronization and supply chain management, to address elements
or stages of this new management philosophy (Tan et al., 1998a; New, 1997; La-Londe
and Masters, 1994). The understanding and practicing of supply chain management has become
an essential prerequisite for staying competitive in the global race and for enhancing profitably.
(Tan et al., 2002).

Suppliers have been acknowledged as the best intangible assets of any business organization
(Muralidharan et al., 2002). Tracey & Tan (2001) mentioned that one of the key elements
essential to supply chain success is an effective purchasing function. H Shin et al. (2000)
proposed that the buyer performance can be enhanced with the improvement of supplier
performance. Smith et al. (1995) considered that the good relationship between buyer and
supplier is based upon exchanging information and sharing benefits with each other. However,
Spekman (1988) showed that communication between supplier and buyer is always limited as
buyer always focuses on the price of products and ignores the importance of preserving the long
term relationship with suppliers.

These papers define the idea, moralities, environment, and growth of SCM and specify that there
is a strong research being conducted around the world in this field they unfavorably evaluated
expansions in the concept and exercise of supply management. Gunasekaran and McGaughey
(2003) stretched the range of SCM beyond material management, organization, information
7
expertise to the Total Quality Management areas like management assurance, organizational
structure and training, communication issues, etc. As firms' survival lies on incorporation, a good
understanding of the incorporation process is a key phase in SCM. Mouritsen et al. (2003)
discussed that basic theory the more integration (wider the scope) the better the management
of the chain" is not always true and proved that it depends very much on the environment" of
the supply chain and the power relations between the participants in the supply chain.

Authors projected a set of management methods and tools to investigate successful SCM
Strategies. It is also perceived that research is not restricted to theory testing and data
investigation, but more advanced techniques like recreation, Artificial Neural Network, and
Ambiguous logic are also used for optimization and decision making in SCM. Koh and Tan
(2006) used the moralities of ambiguous logic for investigating and observing performance of
suppliers based on the conditions of product quality and delivery time whereas Chiu and Lin
(2004) showed how the concepts of cooperative agents and artificial neural networks (ANNs)
can work together to enable cooperative supply chain planning (SCP). It appears from literature
review that researchers have studied supply chain management from an organization perception,
or the systemic natures of interactions between the contributors of supply chain are perceived.

8
Product lines of Unilever Pakistan Limited
PERSONAL WASH

TOILETSOAPS Lifebuoy Lifebuoy Lux Rexona Liril


(carbolic soap) Gold (2 (2varieties)
varieties) (4varieties) (3 varieties)

FABRIC AND HOME CARE

FABRIC WASH Ultra Surf Surf micro Surf Excel Power Surf Sunlight
Washing
Powder &
Soap

HOME CARE Vim Dish Vim Bar Vim


Powder
Washer/Scourers

HAIR CARE Sunsilk Shampoo Lifebuoy Harmony


Shampoo Soap
(4 varieties)

SKIN CARE Fair & Lovely Ponds skin Ponds talc


skin cream and cream
lotion

DENTAL CARE Close-up Tooth Pepsodent


paste Tooth Paste

OIL AND DAIRY BASED FOOD

BANASPATI Dalda Dalda Dalda Planta


COOKING OIL Cooking Oil Sunflower
(Soya Bean) oil

MARGARINE Blue Band

TEA

9
LEAF TEA Yellow Label Yellow label Richbru Top Star Taaza Leaf
Danedar

DUST TEA Pearl Dust Ruby Dust A1

MIXTURE TEA Taaza

ICE CREAM

Cornetto Feast Feast Stickless Top Ten Star Cup Callipo

(3 varieties) (2 varieties) (4 varieties)

Split Fruiti Peddle Pop 3-D Solo Polka Cup

(3 varieties) (3 varieties)

Panda Dracula Family Packs

PRODUCTION UNITS:
Different factories of Unilever Pakistan Limited are working in different areas of Pakistan. Brief
information about these units is given below:

RAHIM YAR KHAN:


The major and the oldest of UniLever is located in Rahim Yar Khan. Mostly at this factory
personal products, soaps, glycerin and dish wash bar are factory-made.

SITE SELECTION (1946).


CONSTRUCTION STARTED (1949).
SOAPERY (1954).
ANIMAL FEED PLANT (1960-1980).
EACH PRODUCTS PLANT (1981).
SOAPERY EXPANSION (1991).

10
KARACHI TEA FACTORY (KF):
This factory was recognized in 1950 and it is located in west Landing stage area. Formerly it was
preserved and achieved by Lipton Pakistan Ltd. In the last 43 years many modifications are made
here and the factory has expanded considerably. In this factory only tea is created and wrapped.

KARACHI EDIBLE FATS PLANT (1952-1997):


It is located on Hub River in S.I.T.E. A&B Oil Industries recognized the factory in 1958 and the
production of the vegetable oil began in 1962. In 1965 Unilever Pakistan Limited acquired the
factory. Banaspati, cooking oil and margarine are produced here and dispersed all over the
country.

ICE CREAM FACTORY:


This is recently established on Multan Road in district Kasur. The plant was commissioned in
1994 having the most modern and modern machines installed. Walls Ice cream is being man-
made here. LBPL, when acquired the Polka, also purchased its two factories, one is in Lahore
and other is in Karachi.

BEST FOODS FAISALABAD:


Recently LBPL has acquired Rafhan Maize Products from Best Foods International.

TEA PROCESSING PLANT (MANSEHRA):


The new Unilever Pakistan Limited Black Tea Processing Plant has been set up at Dhodial, 12
km north of Mansehra on the central Karakoram Highway on 2.5 acres of plot with the
Processing Plant built-in area of 11,800 sq. ft. The plant is predictable to process 50 kg per hour
or approximately a ton of made tea a day. The plant has cost rupees. 11 million whereas rupees.
12 million has been spent on the building and infrastructure. The plant has been inaugurated on
7th of September, 2001

Restructuring of Supply Chain Management of Unilever


Pakistan Limited
Path to Growth;
In the year of 2000, the causes of the Restructuring of Supply Chain Management in Unilever Pakistan
limited is the growing attractiveness of internet and telecom stocks were moving consumers away from
the old stock. UniLever stated a five year growth strategy to bring a major change in the company. This
initiative was named as Path to Growth Strategy. UniLevers corporate strategic agenda which
intentions to double the dimension of the business in seven years and to grow profits faster than the

11
opposition, thus ensuring that we are the leaders in comparable type companies in providing top worth to
our shareholders.

Six Strategic Thrusts:


The six strategic thrusts that make up the path to growth are:

1. Reconnect with Consumer:


By taking real perceptions into consumer needs, preferences and future desires. This
means knowing and understanding consumer`s lifestyles, routines and approaches and
creatively adjusting brands to their altering needs.

2. Brand Focus:
Cultivate their leading international brands by focusing our resources behind them while
still supporting golden provincial trademarks and local gems. Innovation will be the
bedrock to guaranteeing our brands are adjusted to consumer`s future desires.

3. Pioneer New Networks:


Broaden their means of going to market i.e. getting consumers and customers. This
means developing new channels such as direct marketing, home-vending, fashion
channels, portable, food service and out-of home.

4. World Class Supply Chain:


To adjacent the gap to global world class within three years by creating brand
collaborations, bigger logistics and supply chain and by creating a world program.

5. Streamline:
All that they do by reducing difficulty, replication and by creating the best use of I.T. to
deliver the high quality material once.

6. Creativity Culture:
By generating a culture which shapes the mindset and movements among all employees
towards winning in the market-place by building an organization fit for growth.

SCM Restructuring Plan and Focus Areas:


Unilever decided to change its massive brand collection from 1600 to 400 in order to allow its
complete attention. Unilever dedicated on 400 key trademarks including Dove soap, Lipton tea,
Calvin Klein fragrances, Close-up toothpaste, Magnum ice-cream and Omo fabric detergent. Tail
trademarks drop away, good brands stay. The SCM restructuring plan was built around five
focus areas.
12
Organization`s Supply Chain Management
Processes like Worldwide Procurement.
People like Supply Chain Officials.
Supplier Involvement.
Technology like E-procurement and Information Technologies.

5 S`s of Workplace Organization:


The 5 Ss remain a collection of methods toward stimulate workstation organization, ensure
respect towards standards as well as temporary the spirit of continues improvement. Following
are the main 5 S`s of workplace organization.

The 1st S: Sort;

To get rid of annoying items. Decide what is wanted to be kept, and what is not wanted and to be
cast-off.

The 2nd S: Straighten;

To trace an exact place for definite items of a particular quantity, where wanted. Determine
addresses for resources and tools. Put them in that residence and keep them there.

The 3rd S: Shine and Sweep;

To use washing to identify irregularities and areas for upgrading. Clean the workstation and at
the same time visually sweep for irregularities or out or control situations.

The 4th S: Standardize;

To associate the first 3 Ss by creating standardize measures. Determine the best work performs
and find ways of ensuring everyone does it the same best way.

The 5th S: Sustain;

To tolerate perfections and make further growths by cheering active use of the Plan-Do-Check-
Act cycles. Keep all current developments in place and develop an atmosphere for upcoming
enlargements.

13
Operations of Unilever Pakistan Limited:
Material Store:
Material store is an apartment where raw material is warehoused. The management structure of
material store is as follows:

Material Store Department contains two hangers and one perfume store. Total area of
each hanger is 256 x 107 feet. Material store has an above flow depot exterior the factory.
Material Store Department handles near about 650 items of raw material.

Function of Material Store:

Two core functions of material stores are

1. Receipt of Material
2. Issue of Material

1. Material Receipt Process:


Material store collect two category of material:

Oil and Fat, Liquid Caustic

Packing and Raw Material

14
The process of receiving these materials is different from each other. We will discuss these
procedures one by one.

a) Receipt of Oil and Fat, Liquid Caustic:

The procedure of receiving Oil and Fat contains following steps.

Stage 1: Weigh Bridge:

First stage in material receipt system is Weigh Bridge where vehicles reach. Capacity of Weigh
Bridge is 80 tons. There are two operators on the weigh bridge. The Function of Weigh Bridge in
goods receipt process is as follows:

Truck or other type of vehicle driver come on Weigh Bridge and gives truck invoice
to weigh bridge operator which is issue by the merchant of material. The weigh
bridge operator checked the type of material weight on truck and note the truck
number and its timing of appearance.

If material is for packing and raw then it is sent to material store for unloading. If
material is Oil and Fat tankers are sent to sampling point. Lab assistant takes tester
from tanker. Operator of Weigh Bridge makes a sample coupon and then this coupon
is sent with tester of material to lab for inspection.

Tester coupon consists of date, sample no, mark no, supplier name, quality, quantity,
and truck no. The operator is informed by telephone from lab that sample is ok. Then
operator on weigh bridge take the first weight of loaded tanker and feed data in
system with the help of software Weigh Bridge which includes serial number,
supplier name, truck number, material name, sample no and first weight. Print of this
data is attached to truck invoice. Then operator makes a weigh bridge slip and give it
to driver and send driver to unloading place.

Weigh bridge slip contains date, party name, truck no, material name, and signature
of weigh bridge operator. One section of weigh bridge slip is filled by the operator on
Weigh Bridge and other section is filled by the operator on receipt on material. The
part of weigh bridge slip which is filled by the operator on receive contains received,
material name, truck no, and tank nowhere material is unloaded.

After dropping of material tankers come back to weigh bridge. Driver gives back the
weigh bridge slip to operator and unloaded tankers are weighted. The operator feed
this weight in Weighbridge software and calculates net weight. Then print of data is
attached to truck invoice. Operator checks the difference between net weight and
weight written on truck invoice. If it is minor difference than it is ignored.
15
If it is major difference than it is mentioned on truck goods receipt which operator
makes after second weight?

a. Two copies of TGR are given to driver and two for office. Truck good receipt
contains following data.

Supplier name, date of receipt, city name, date of sending, quantity,


packing type, description of goods and truck no.

b. Operator enters this data is in daily sheet, which is prepared in excel. Daily
sheet contains following data;

date of receipt, entrance time, truck no, TGR no, mark no, article code,
supplier, product, sample no, dispatch weight, received weight, difference,
out time, system posted(yes/no), remarks, weigh bridge operator.

16
Process Map of Weigh Bridge

17
Step 2: Emptying of Oil and Fat, Acid:

Oil and Fat, and Liquid Caustic are unloaded on different point and process of unloading is
different.

18
Private Company Tankers:

Five trucks of 25 tons each can be dropped at a time. Truck driver brings truck to tallow
decanting area and give weighbridge slip to operator on unloading. Operator footnote the time
when unloading start. If tallow is in freeze state in tanker than with the help of steam operator
melt the tallow and then unload tallow in drop tank. From drop tank tallow is shift to Containers.
Tallow area contains two containers having capability of 200 tons each. Temperature of these
containers is maintained according to material.

This material is than shifted to loading tank from containers. Before shifting material to loading
tank the operator on receipt clear the pipe line to storage tank with help of steam and when line
clear than material is shifted with help of tube. After unloading operator note time and fill the
weigh bridge slip and give it back to driver.

Unilever Pakistan Limited Tankers (Big Belly):


Company has its own trucks, which are called Big Belly. These trucks have ability to preserve
the temperature of material. Material loaded in big belly is directly stored in loading tank with
the help of pump. But before unloading pipeline is clear with the help of steam.

Liquid Acid:
Truck loading acid reach at unloading place. Driver gives weigh bridge slip to operator. Acid is
first unloaded in drop containers and from drop containers acid is shift to loading container with
help of pump. Two drop containers are used to unload the trucks. Capacity of these two drop
containers is 25 tons each. Two loading containers ST 66 and ST 25 is used to store the acid.
Capability of these containers is 150 tons each. After unloading operator fill the weigh bridge
slip and give it back to driver.

Receipt of Packing and Raw Material:


Packing and raw material is unloaded in two hangers. One is hanger no 2 where personal product
packing and soapy elements. Other is hanger no 3 where packing soapy and raw material is
stored. Truck stocking packing and raw material first reach to weigh bridge where operator on
weigh bridge not the truck number and time of arrival and send it to hangers for unloading.

Operator on receipt of packing and raw material check the truck invoice which contain name of
material, type of material, purchase order number, and quantity. Operator drops the material of
truck and keep material to their exact location. During unloading operator also take tester of
material which is sent to lab for inspection. Operator approvals the material, tally it and match
the quantity received with quantity printed on truck statement.

After unloading material truck good receipt is equipped which contain supplier name, quantity
received packing, and description of product and discrepancy. Two copies of this receipt is given
19
to driver and two copies are keep in office. TGR contains the following data. Supplier name, date
of receipt, city name, date of sending, quantity, packing, report of goods, divergence if any. After
TGR is issued the data is posted in Ledger.

Following data is posted in ledger. Date, truck no, purchase order number, name of company,
invoice number, item code, description, quantity, pack, price, GRIR no, quantity ordered, and
remarks. With the help on entries in ledger than data is feed in MFG Pro.

20
Process Chart of Receipt of Packing &
Raw Material

21
2. Material Issue Procedure:
Issue procedure of oil and fat, liquid Acid, packing and raw material is different with each other.

Issue Procedure of Oil and Fat:


Loading containers are kept occupied. Operator notes the level of material store in loading
container with the help of measure device. Then operator moves oil and fat from loading
containers to pot room containers. During issue operator takes tester of material and makes a
tester slip and send tester with tester slip to laboratory. After allotting operator note the level of
container. Then quantity of issue is calculated by deducting previous level noted from up-to-date
level note. Then operator fills the issue sheet and makes two copies of it. One is given to operator
of POT room who is present there. Oil and fat issue sheet contains following type of data. Batch
no., shift, quality, tank no., staffing, sample no., net, refinery/pan room tank no., signature of
Material Store Department operator, signature of pan room operator, and remarks. Other copies
are sent to administrative center where authorized officer with the help of this sheet transact data
in MFG Authority and makes a quality order and send it to laboratory.

Issue Procedure of Liquid Acid:


Operator summaries the level of loading container. Level of container is measured with help of
gauging tape. After issuing operator check the level of loading container and records the
difference on issue sheet. One copy is issue sheet is given to operator of PAN room and other is
send to office. Next day PAN room sends an issue note to office where authorized officer feed
data in MFG Professional.

Issue of Packing and Raw Material:


Issue of packing and raw material handle by three operators. One operator issues packing
material to personal product department. Second operator issues packing material to soapy and
raw material to NSD. Third operator issues chemicals to soapy and personal product department,
perfumes and colors. Issue note is conducts to material store one day earlier issue from
manufacturing departments. Related officer in store records the name of material and quantity of
issue on notebook of related operator.

Next day operator record the size of issue on lot card from where operator is allotting and
records this lot number in his notepad. With the help of fork crane material is send to
manufacturing departments. After allotting material operator records this lot number in issue
note. Related officer post this data in MFG Pro.

22
Return of Material:
Allotted material can be come back to material store from manufacturing departments because of
two reasons. Goods not necessary forbidden due to any problem. If goods are returned on first
base than manufacturing department send a return note with material to store. This material is
stored near the lot from where it was allotted. A new lot number is forwarded on this material.
Related officer post return note in system. This material will issue first on prerequisite. If goods
are return on second base than first a laboratory subordinate check the material.

If material is forbidden than it is stored separate place particular for rejected material. A card
which consist of lot number from where it was issued and number of issue note against which it
was allotted is forwarded on this material. Related officer sends e-mail to Provider Corporation.
The Supplier Company inspects the material and if it is rejected than it send fresh material to
company.

Buying Department:
The word Buying means procurement of anything or any merchandise or article. This function
is accomplished by purchasing department in any organization. Buying or acquisition is one of
the major purposes of any company of organization. Without it no one association can run
successfully in the field of business. So we may say that buying is the soul of company. Without
purchasing all departments of the company will be unsuccessful.

Objectives of Purchasing Department


The key purposes of any purchasing department is to purchase merchandise and services with the
purpose of guaranteeing the description, quality, price, time of payment and timing of supplies
are reliable with the overall want and purposes of the business.

Purposes:
These are the following purposes performed by the purchasing department of R.F.

To purchase all making raw materials including all categories of material and packing
material.
To purchase administration department demanding items.
To purchase all engineering demanding items (all types of machinery & spare parts).
Purchase of medicine for operation.
All types of factory purchases through procurement department.
Sales of scratched or leftover items of various department relating assets goods.

23
Procedure of the Acquisition of Goods:
The company has preserved a fine system of purchasing. In fact, procurement department
performs its purposes on resident basis. But imported raw material & packing material is bought
by the central procurement department head office. The procedure of buying can be explained
with the help of following charts:

Purchase request.
Quotations requests.
Summary of quotations is made.
Purchase order.
Goods receipt.
GR/IR is prepared.
Store report.
GR/IR is accepted.
Payment.

Procurement Requisition:
Any department which has a want of something sends purchase request regarding its requisite to
procurement department, who arranges for the purchase of requisite items as soon as possible.
Three copies of purchase requisition are prepared. These copies distributed as follow: 1 st &
2nd for procurement 3rd for requisitioning department (demand for purchase items).

Profession Summary of Quotations & Assigning Of Order:


First of all the procurement department requests to general public for quotations and to certain
specific parties. After receiving profession summary of quotations is organized and made
evaluation with price, quality, etc. After that the party is unambiguous on which an order is to be
assigned according to the terms & conditions. Then purchase order is ready in the favor of
flourished party. All information concerning delivery and shipping is mentioned in purchase
order.

Four copies of purchase order are equipped and scattered as follow:

White for accounts department


Pink for requisitioning department
Green for buying department
Blue for payment department

24
Receipt of goods & homework of GR/IR
When goods are received from supplier then GR/IR is arranged by material stock department and
sends to laboratory for inspection. If goods are accepted in the laboratory then these are located
in the concern store otherwise not. Four copies of GRIR are prepared and distributed as follow:

1st for account department


2nd for buying department
3rd for concern department
4th for laboratory
In case if the material is not accepted then a sundry sales (SSA) advice or sundry sales credit will
be made to return the goods to the supplier. Three copies of SSA are prepared:
1. First for requisitioning department
2. Second for financial records department or distribution department
3. Third for procurement department

Payment:
When GR/IR is accepted then one copy of it is give in to payment department, where the
payment department makes payment sheet and makes information to the cash office for payment
after satisfactory the other formalities.

Supply Chain Management:


The firm has segmented structure of Supply Chain Management. The purchasing, production
control and distribution departments have obligation for material management.
SITARA CHEMICALS is the supplier of local raw material of soda ash, caustic soda, etc.
Supplier selection is constructed on price, quality and delivery. Safety Stock (2 to 3 weeks) for
basic imported material 2 weeks for packaging material

LEAD TIME: Lead time of the material is the 13 to 20 weeks.

Forecasting
Demand Forecasting

A forecast is the expectation of future events used for the planning resolutions.

Forecasting at Unilever Pakistan Limited:

25
The forecasting method, which is being surveyed by Unilever Pakistan Limited is
the qualitative technique.

Delphi technique.
Executive opinions.
Consumer survey.

Marketing Research
Marketing research is also accompanied by the firm. Data obtained is used to determine the
customer demand pattern, and trends.

Effective Capacity
It is the extreme production that a procedure or firm can carefully endure under regular
situations. When working close to top capacity, a firm can make nominal profits or even lose
money regardless of high sales levels. Processes manager must survey the three dimensions of
capability before creating capacity decisions:

Sizing capacity cushions.


Effectiveness and sizing expansion.
Connecting capacity and other operational decisions.

The capacity cushion is the quantity of reserve capacity that a firm preserves to handle sudden
intensifications in demand or temporary drops of production capacity it measures the quantity by
which the average utilization reductions below 100 percent. Capacity cushion buffer the
organization beside ambiguity as do resource flexibility, inventory and lengthier customer lead
times. If an organization is well stable and a change is made in some other decision zone, then
the capacity cushion may need changes to reimburse.

Cost Department:
This department delivers very useful facilities to the company and is accountable for estimation
of the products. This department does the yield calculations of the followings:

Soapberry fatty acids


Crude glycerin
Refined glycerin
Nourishments

For the calculation of yield, these elements are taken into consideration:

Storage loss/gain
Bleaching loss
Packing loss/gain

26
Un-accounted loss

When oil and fats are received by the material store, sample is taken for gauging percentage of
Free Fatty Acids (FFA) and moisture. All these materials are received by the supplies and then
issued to manufacture department.

Storage loss/gain
At the quarter end, cost department do the stock taking of all the containers of oil and fats and
also draw a sample for defining moisture. Now the price department see that what is the
difference between the physical n=and book stock. This variance will be the loss or gain and
posted to the manufacture account.

Bleaching Loss/Gain
For the purpose of bleaching the Activated Earth is used. The Activated Earth fascinates some
amount of tallow. This fascination is called bleaching loss. Cost department calculates this loss.

Packing Loss/Gain
When the finished products are packed some packaging loss or gain took place at this phase.
Some products are packed above the regular weight and some less. Packing loss or gain is also
determined.

Un-Accounted Loss
Some damages are not seen in manufacturing procedure, these are called Un-accounted losses.

Reports of Cost Department


Cost department looks into the income and performance of the factory with the help of various
reports. These are following:

Daily Stock Report:


This report tells that how much raw material is shifted to plant, what is the weight of stimulated
earth used, how much fats are served, soap cleaned, glycerin handover to glycerin section,
glycerin preserved and polished glycerin effected into containers. With the help of these
information, this department takes care of yield.

Production accounts of the products:


Cost department makes manufacture accounts of all merchandises with the help of followings:

Raw material cost


Cost of material expended is taken from consumption schedule and is accused to
manufacture accounts after making modification of opening and closing stock.

27
Chemicals
Cost of substances and taken from consumption schedule and prorated on merchandises
pack wise and in these cases whose closing stocks are chemical diverse value is posted to
manufacture accounts after adjustment in opening and closing stock.

Packing material
Packing material but is taken from consumption schedule and then total cost is posted to
production accounts of the merchandises.

Daily production report


The reports of daily production are submitted by the manufacture department to cost department.
This report helps in inspecting what is the manufacture of certain merchandise on certain day and
how many shifted to warehouse and what is the current balance on department floor.

28
Distribution Procedure Of Supply Chain Network In
Unilever Pakistan Limited:
First of all manufacture is shifted to distribution warehouse by the manufacture department.
Distribution department has two warehouses, which are capacity wise 700+150 tons (for soap
and personal products) and 500+200 tons (for cooking oil). Distribution department gathers the
dispatch plan that is delivered by the consumer services head office. Therefore merchandises are
forwarded according to the dispatch strategy. Company has various sales yards located in
different cities throughout the country.

Such as:

Faisalabad
Karachi
Wazirabad
Lahore
Rahim Yar Khan (central)
Rahim Yar Khan (south)
Dera Ismail Khan
Multan

Distribution department sends products directly to distributers or to sales yards as per instruction
of sales department head office. Sales department creates sales agreements with different parties
and supply by instructing distribution in Rahim Yar Khan Place of work. All sales yards are
controlled by head office. Sales department send plans for dispatch to these yards which take
necessary action according to strategy. Rahim Yar Khan South depot covers the zone of
Baluchistan and Sind while Central covers the zone of Punjab and KPK.

There is another yard named over flow depot in Rahim Yar Khan. When there is shortage of
space in factory warehouse, manufacture is transferred to this depot. Distribution department
Rahim Yar Khan Factory sends dispatch tactics to over flow depots. This depot arranges the
supply accordingly. For all the dispatches a dispatch information is organized in which the full
aspects of the merchandises are preserved. Five copies of dispatch advice are arranged.

One copy is sent to consignee through transporter.


One copy of D.A is sent to customer service head office.
One copy is sent to accounts department.
One is for distribution department Rahim Yar Khan

29
One copy is given to transporter that is called acknowledgement.

Distribution Channels
Unilever Pakistan Limited has a central distribution system in which the merchandises are
distributed from one warehouse to the nominated distributor of the company, and then the
distributor make the merchandise offered to the merchants and at the end the product is changed
to the merchants to be acquired by the final consumer. The corporation has direct relationships
only with the distributors for making the product offered to the objective market. It deals with
the distributors on gross and advance payment bases and does not provide any credit facility to
them. However the company provides different commissions encouragements. There are many
proficient distributors of LBPL working in almost all major zones of the country. Sometimes
when the company announces the same product line in different innovative way then it uses the
following channel of distribution.

The company has precisely focused its distributors to provide that innovative products to
retailers skipping out the retailers in the channel. The basic purpose for doing this was to reduce
the retailer commission so that the price can be positioned at comparatively lesser level. In short
the passionate coverage of market is the basic aim of UniLever Pakistan Limited distribution
policy.

Quality Control:
Quality is the usage of methods and actions to succeed, tolerate and progressive quality. It
involves participating the following related methods and happenings:

1. Description of what are desired.


2. Strategy of the product or service to meet the qualifications.
3. Manufacture or connection to meet the full committee of the description.
4. Assessment to regulate conformance to the requirement.
5. Assessment of usage to deliver information for the alteration of condition if desired.
6. Consumption of these happenings delivers the customer with the finest merchandise or
service at lowest cost. The purpose should be continuous quality development.

Objectives
1. OFI Opportunity for Improvement
2. The continuous development of all facilities through total participation of all personnel.
3. The developing and the reinforcement of partnership with exterior and interior customers
and dealers.

30
4. As long as inventive and higher quality merchandises and facilities to attain total
customer approval by understanding their necessities and expecting their future hopes or
requirements.

Roles:
Observing annual goals for quality developments in all zones.
Generating a values of customer attention motivated to convert the lowest cost creator
through decided annual cost bargain program.
Worth people by understanding and illustration upon their strength i.e. capabilities and
awareness and make exertions for their preparation and improvement.

Procurement Procedure:
When raw material is expected the quality of raw material is examined according to the
principles. According to these values if the employees of receiving department will examine
according to the standards. If there are a lot of 500 and they choose 13 testers from the whole lot
then they select the sample from the upper and lower and right and left side of the whole
package. It means that they select the sample by way of differentiating the zone. If the 2 items of
the sample are rejected then the whole lot will be rejected and if the lot is forbidden then they
call back the sellers and seller check that lot again.

If the lot is very much wanted by the manufacture department then they place a written demand.
The 100% inspection is done on it. In this case, they call the sellers or their checkers and they
check it on 100% basis. But this happens in very occasional cases. On the other hand if the lot is
accepted then it is observed as GRL (good received lot) and directed to the store. While four
copies of GRL are made and sent to the following four departments:

1. Purchase Department
2. Quality Control Department
3. Store
4. For Computer Entry

During The Process:


When the merchandise is in-line then quality examiner check it at every phase of procedure. If
these examiners will sign it for next procedure then merchandise will go for next procedure. If
they do not sign it then the work will stop. Then for the accepted and rejected production, the
quality inspector will give report. This report has also involved the sign of manager of procedure
zone. So that examining the refusal and approval percentage for next modification and

31
development. Then report will pass to the manufacture supervisor so on this base they can make
the once-a-week and once-a-month report. And it will clearance to the top administration. In this
examination is done at every stage and will pass towards the top management. The ISO has
agreed them standard for the entire procedure. It also contains the primary price but the
successively cost is more harmless and actual because the probabilities of refusal are condensed.
We can say that the probabilities of refusal will be well-ordered. In this way the excellence level
is much improved and it lessens the customer objections. Once-a-month maps are also prepared
and management also takes improvement activities. If there is a need of educative act then they
will demand. The instant action will be occupied on that form and until the corrective action will
not be taken they manufacture level will be stopped. Quality control sector has given their
measurements. And if there is any abnormality from these measurements then even the MD of
the company cannot start the manufacture.

SCM Expertise in Unilevers Business Model:


Unilever's generally expertise idea contains a strong thrust from client-server to thin-client
structural design, Net expertise that take the company nearer to its customers, and business
analytics to make management information informally right to use, according to Rick Ballou, IT
corporate-zone director for Unilever Home and Personal Care North America.

With a market capitalization of $28 billion, the consumer-products enormous described that its
latest IT successes contain the rollout of business-intelligence interface from Hyperion, and
"SAP ERP wall-to-wall" as a worldwide standard. Unilever also has seen important cost reserves
from its investment in Ariba's obtaining technology, which has motivated in a lessening of the
workplace stock buying budget by millions of dollars, and a merging of data hubs from 18 to
five; ultimately, the number will decrease to three.

A cross efficient worldwide commission already is operational on the change from desktop
client-server to doorway technology. On the B2B front, in adding to its RFID energies, Unilever
is contributing in a manufacturing extensive effort to systematize data features during the course
of the supply sequence through UCC Net. Unilever has also stated their constant interest in
CRM. Unilever cooperates on arithmetical and market campaign predictions for key
merchandises with a few enormous consumers, using a cooperative system from Waltham, Mass
based Syncra Systems Inc. The organization as whole had numerous ERP and CRM systems
from numerous sellers, and 34 custom built data storerooms. Unilever currently runs 100
separate, complete SAP Enterprise Resource Planning Systems. Similar on these lines, some of
the major SCM technologies and IT explanations applied in the business model of The Unilever
Group are discussed below: -

ISIS (Integrated Supply Management Information System): ISIS is Unilevers integrated supply
management information system. It helps its resident, local and worldwide supply managers
make suitable obtaining resolutions, letting them to gather and examine information rapidly and

32
definitely. The system allows its superiors to discuss with sellers in a apparent and proficient
way, profiting mutually parties.

E-procurement Explanations from Ariba: Best performs in E-procurement competition by


applying the Ariba shopper E-procurement explanation. Unilever reputable the European Ariba
Academy to deliver numerous site execution and computer-generated preparation. Unilever
nominated the Ariba Buyer software for e-procurement following a severe collection procedure
and primary model in North America. Even if preliminary achievement has been attained
Unilever considers that these are still early days and that the profit of asset has still to be verified.
While e-procurement is a probability for upcoming supply chain optimization the supply market,
mainly in Europe, is still suffering from below enlargement. There is a developing appreciation
that e-Procurement can have emotional impact on total supply chain tasks rather than just
transactional movement. Until just few have taken action to implement or benefactor the
obligatory variations. Hopefully still, Unilever considers that this position is shifting and
categorically e-Procurement delivers a enabler for positive enlargement in supply management
framework.

Enterprise-Scale Data Warehouse and Business Intelligence Solutions: In order to increase a


strong opinion of business performance through its 34 companies in 19 countries, Unilever Latin
America has entered upon an enterprise-scale data storeroom and business intelligence project
called Sinfonia. At the heart of Sinfonia, KALIDO enterprise data warehouse conception and
management software (KALIDO) delivers an explanation that will cultivate to contain one of the
major catalogues in the creation by 2007. KALIDO delivers a gathered opinion of data across
Unilever Latin America at high speed all the way through perpetual business alteration such as
acquirements and market merging. KALIDO is now making it probable for Unilever Latin
America (Unilever LA) to construct and achieve a fully efficient, adaptive data warehouse all the
way through its lifecycle while all together developing out a primary local SAP system in a 4 to
5 year sister project called Harmonia.

The suppleness of KALIDO is allowing Unilever LA to maintain business steadiness as the


Sinfonia and Harmonia tasks remain to move out. The KALIDO data storeroom will cultivate
both in environmental exposure and in choice, and is predictable to reach 12 TB in dimensions.
Through this period of development it will provide constant business information, attractive
cumulative dimensions of records from the continuing SAP execution. Unilever LA is meeting
procedures, systems and information to allow a really local methods to business. Using the
KALIDO enterprise data warehousing solution, the organization is effectively providing a large-
scale enterprise data warehouse, on time and within financial plan, while all together rolling out
a area extensive SAP system. The new information architecture Sinfonia, automatic by
KALIDO, will provide high-quality data to 4,000 operators by 8 am every day across five time
zones.

33
The explanation will allow well understanding of district supply chain procedures, brands,
customers and dealers, and will agree to Unilever to react quickly to new occasions, even beside
a background of continuous interior and exterior business alteration. Finally, KALIDO will
simplify tactical preparation and drive better decision-making, by providing designer information
at high quickness to key business users, allowing Unilever to understand considerable ratio
reserves and enhanced capability to exploit on business chances. Supply Chain Information
Systems: Using a variability of information systems and numerous other supply chain
management expertise, Unilever intentions to improve its supply chain business model.

Financial Ratios of Unilever Pakistan Limited


These are the following six main Financial Reports of Unilever Pakistan Limited as under;

1. Liquidity Ratio:

Current Ratio = Current Asset/Current Liabilities

Ratios 2012 2011 2010 2009 2008

Current Ratio 0.82 0.79 0.83 0.78 0.69

34
Current Ratio
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20 Current Ratio
0.10
0.00
2008
2009
2010
2011
2012

In 2012, according to the financial positions of Unilever Pakistan Limited, it shows that Unilever
Pakistan Limited improves 0.3 in points from the previous fiscal year 2011. So, this ratio is very
important for the Creditors. In recent five fiscal years data, you can easily see that the high
stability of the assets in the year of 2010.

Quick Ratio = (Current Asset - Inventory)/Current Liabilities

Ratios 2012 2011 2010 2009 2008

Quick (Acid-test) Ratio 0.30 0.30 0.40 0.27 0.19

35
Quick Ratio
0.45

0.40

0.35

0.30

0.25 Quick Ratio

0.20

0.15

0.10

0.05

0.00
2008 2009 2010 2011 2012

Quick ratios of the Company tells about the ability to fulfil its short term obligations more
perfectly. Creditors of any organization or company satisfied with the financial positions of the
company and agreed to invest their capital investment in the company. Financial managers can
improve it in order to make liquidity position better.

2. Activity Ratio:

Ratios 2012 2011 2010 2009 2008

36
Inventory Turnover 59% 49% 46% 58% 64%

Inventory turnover Ratio = (Cost of Goods Sold / Inventory) * 100

Inventory Turnover
70

60

50

40
Inventory
30
Turnover

20

10

0
2008 2009 2010 2011 2012

Inventory turnover ratio tells about the ratio of Cost of Goods Sold with inventory
exist and also tells with which speed of company`s inventory converts into cash or
sales. In 2012, the inventory turnover ratio improves 10% with respect to the
previous fiscal year. But company should catch that ratio which was in 2008 that is
64%. To meet with that ratio of 2008 fiscal year, a company should increase the
growth of plant or install higher efficient plant and company`s HR manager should
increase the labor workforce.

Profitability Ratio:
Gross Profit Margin= (GP / Sales)*100
37
Ratios 2012 2011 2010 2009 2008

Gross Profit Margin 36% 35% 33% 35% 35%

Gross profit margin


36.5

36

35.5

35

34.5

34
Gross profit margin
33.5

33

32.5

32

31.5
2008 2009 2010 2011 2012

GP Margin measures the margin available on sales. It reflects the efficiency


with which an organization produce its merchandise. In 2012, GP margin has
increased by 1% with respect to the previous fiscal year 2011. The reason behind
this increment that was the growth in the daily and personal care products by 25%
and in ice-cream sector by 8%. Gross Profit ratio shows that the increase in the
performance of Operation Manager.

Operating Profit Margin Ratio:


OP margin = (Operating Profit / Net Sales) * 100
38
Ratios 2012 2011 2010 2009 2008

Operating profit margin 15% 13% 12% 14% 11%

Operating profit margin


16

14

12

10

8
Operating profit margin

0
2008 2009 2010 2011 2012

OP Margin: Operating profit margin ratio is used to measure the company`s pricing
strategy and operating efficiency. Operating profit margin is a measurement of what proportion
of company`s revenue is leftover after paying for variable cost of production like wages, etc. So
in this analysis shows that it increased by 2% in 2012 and according to the analysis of recent 5
fiscal year 2008-12 ratios indicates that the operating profit margin percentage is increased by
3% in 2009 but instantaneously decreased by 2% in 2010. As operating ratio analysis shows that
the administration manager performed well in 2011 and in 2012 also.

Earnings per Share Ratio:

39
Earnings available for common Stockholder / No. of share of common Stock
outstanding

Ratios Year 2012 2011 2010 2009 2008

Earnings per share (EPS) Rupees. 413 308 246 230 149

Earning Per Share


450

400

350

300

250
EPS
200

150

100

50

0
2008 2009 2010 2011 2012

Earnings per share ratio: Earnings Per share ratio is used to measures the profit
available to the equity shareholder on a per share basis. Higher the Earnings per share ratio
indicates that the company may pay dividend at a higher rate. The earnings per share of the
company was increased in 2012 by rupees 105 with respect to previous fiscal year 2011. This
was mostly due to increase in profit after Tax. It indicates that company have maximized the
shareholder`s wealth and achieving a better return without issuing any new share. As you see that
a gradually increase in the earnings per share in recent 5 fiscal years with in the period of 2008 to
2012.

Summary of the Financial Ratios of Unilever Pakistan


Limited Company:
40
In Unilever Pakistan Limited, many financial ratio had discussed in past fiscal years which was
2008 to 2012. These financial ratios tells about the company position that where company stands.
These financial ratios such as Liquidity Ratios, Activity Ratios, GP Margin Ratio, Operating
Profit Margin Ratio, Earnings Per Share Ratio, etc. Liquidity ratio tells about the company`s
financial position and ability to fulfil its short term liabilities. In liquidity ratio, two main ratios
lies in it, first one is the current ratio and the second one is the quick ratio.

Current ratio tells about the financial position of the company which includes the assets and the
liabilities. According to the current ratio of the Unilever Pakistan Limited in 2012, company
improves its current ratio 0.3 in points (0.82) from the previous fiscal year (0.79) 2011. In recent
fiscal years from 2008 to 2012, company improves its assets over to the liabilities. This ratio is
very important for the creditors as well as shareholders because it tells the company`s position in
terms of short term obligations and also shows that the company has enough liquid assets.

Quick ratio tells about the company`s ability to fulfil its short term obligations more accurately.
According to the quick ratio of the Unilever Pakistan Limited in 2011 and 2012 fiscal year, it
remains the same 0.30. In 2010 fiscal year, the figure is the 0.40 that tells about the company`s
ability that is more stable as compared to the 2011 and 2012 fiscal years but company maintains
its position in 2012 fiscal year so that`s why creditors of the firm satisfied with the company`s
financial position and agreed to invest their capital amount in the company. Financial manager
can manage and improves it in order to make liquidity position much better.

Activity ratio tells about which speed of company`s inventory convert or transformed into cash
or sales. According to the activity ratio like inventory turnover ratio of Unilever Pakistan
Limited in 2012 fiscal year, the inventory turnover ratio increase by 10 % which was 59 % as
compared to the previous fiscal year 2011 that was 49 %. But company should catch that
inventory turnover ratio which was in 2008 fiscal year that was 64 %. If the company really
wants to catch that ratio so company should increase or up-gradation of the plant and install
higher efficient plants. Company`s HR manager should increase the labor workforce.

Gross Profit margin ratio measures the margin available on sales. According to the GP margin
ratio of Unilever Pakistan Limited in 2012 fiscal years, GP margin has increased by 1% with
respect to the previous fiscal year 2011 that was 35%. It reflects the efficiency with which a firm
produces its merchandises. And the reason behind this increment that was the growth in personal
and daily care merchandises by 25 % and in ice-cream products by 8 %. Gross Profit margin
ratio shows that increase in the performance of operation manager in the operations department.

Operating Profit margin is usually used to measure the company`s pricing strategy and
operating efficiency. According to the analysis of Operating profit margin ratio of Unilever
Pakistan Limited in 2012 fiscal year just increased by 2 % and according to the analysis of
recent 5 fiscal years ratios indicated that the Operating Profit ratio was increased in 2009 fiscal

41
year but due to some negligence, Operating Profit ratio was decreased in 2010 fiscal year. As
Operating Profit ratio shows that the administration manager performed well in 2011 and 2012
fiscal years.

Earnings Per Share tell about the company`s stability and this stability means that higher the
ratio of Earnings per share is higher the dividend paid to the shareholders. This ratio also
measures the profit available to the equity shareholder on as per share basis. The Earnings per
share of the company was increased in 2012 fiscal year by rupees 105 with respect to the
previous fiscal year 2011 that is rupees 308. It indicates that the company have maximized the
shareholder`s wealth and achieving a better return without issuing any new shares. So, all
financial ratios indicates that Unilever Pakistan Limited performed well in 2012 fiscal year as
compared to recent fiscal years which are 2008 to 2011. According to this analysis, these ratios
indicates that company is in way to success. So, we can say this company in two words that is
Blue Chip Investment Company.

Series 1
3
Series 2
Series 3
2

0
Category 1 Category 2 Category 3 Category 4

42
What problems faced by Unilever Pakistan Limited in
supply chain management?
As you know problems are everywhere, but in supply chain problems are quite different. These
are the following main problems faced by Unilever`s management in supply chain as under;

Some degree of fresh products or merchandises are announce in the marketplace but ratio
of achievement of fresh products or merchandise is quite little. Massive competition in
routine merchandises like cooking oil and ghee, ice-cream and daily personal and care
merchandises against the Unilever Pakistan limited in the market.

Huge amount of catalogue stocks of crude material and finished or semi-finished


merchandises. Massive inventory carry more space and thats means more cost incurred
on it.

Impacts of these Problems:


These are the following impacts of these problems or hurdles on a way to success in an
organization as under;

That new product are offered in the marketplace but due to some reasons the ratio of the
new product offered success is not much for an organization. And that would be bad
impact on the upcoming merchandises or new products which is in conversion procedures
like delay in the work-in-process procedures or manufacturing processes. An
organization should noticed the reasons of the products or services which is not so good
like others products of an organization.

43
Huge amount of inventory means high carrying cost incurred on it. An organization
cannot invest their capital in other projects or tasks or activities because an organizations
investment capital money pledge in the form of massive raw material and finished goods
or semi-finished goods.

CONCLUSION
Unilever Pakistan Limited is devoted to variation in a working atmosphere where there is
common belief and admiration and where everybody feels accountable for the presentation and
status of our company. They are dedicated to harmless and strong operational situations for all
Personnel. We will not use any kind of obligatory, enforced or child effort and devoted
functioning with personnel or workers which is working over here in workplace to mature and
improve each person's Services and Competences. Unilever Pakistan Limited is provided that
brand named merchandises and facilities which constantly offer value in terms of price and
superiority, and which are harmless for their projected procedure. Merchandises and facilities
will be precisely and appropriately branded, marketed and transferred. Unilever in internationally
conducts its procedures in agreement with worldwide recognized moralities of good corporate
authority.
Unilever Pakistan Limited provides appropriate, ordered and trustworthy information on our
undertakings, building, fiscal situation and performance to all stockholders. Unilever is creating
equally advantageous relationships with our sellers, consumers and business associates. Unilever
is making constant development in its supply chain management and standard of announcement
and strategy. More than 150 million times a day somebody, someplace is selecting a Unilever
merchandise. A decent trademark is energetic to a business and this report has reflected how
Unilever has achieved to be just that. It is clear from the examination and survey passed out that
the company is accepting worldwide marking to its highest standards and that is precisely how
the worldwide existence of any company is occupied to its highest levels of achievement.
So far UniLever has been capable to be one of the finest in the business. That is what worldwide
marking is all about? It agree to businesses the admittance to customers all above the world and
escalations their consumer base to a great level. It agrees them to enlarge their possibilities and
to make a worldwide influence of their merchandises all over the world. They have more market
segments to object and can escalation their product mark to a large level. Dissimilar countries

44
market their merchandises. These are the benefits of companies going worldwide and they have
been reflected above in this research in the procedure of UniLevers worldwide success.

In this discussion, I am also conclude the financial ratios of Unilever Pakistan Limited in the
period of 2008 2012 that tells the financial status of company in which Current Ratio tells
about the financial position of the Unilever Pakistan Limited that company`s assets getting
strong or upgraded in 2012 fiscal year with respect to 2011 fiscal year against the liabilities of
the company. Quick ratio tells the company`s ability to fulfil its short term obligations more
accurately. In 2011 & 2012 fiscal years company`s ability remain the same but in 2010 fiscal
year company is more stable but in 2011 and 2012 fiscal years company maintains its ability to
fulfil short term obligations so then creditors satisfied with the performance and agreed to invest
more in Unilever Pakistan Limited.

In Activity Ratio, it tells that which speed of inventory turn into or transformed into cash or
sales. Inventory turnover ratio increased by 10 % which was 59 % in 2012 fiscal year with
respect to previous fiscal year 2011 which was 49 %. But in 2008 fiscal year company`s
Inventory Turnover Ratio was 64 %. Unilever Pakistan Limited should catch that inventory ratio
which was in 2008 fiscal year. In Gross profit margin tells the margin available on the sales. In
2012 fiscal year, GP margin increased by 1% that was 36 % with respect to the previous fiscal
year 2011 which was 35 %. It shows that company performed better than previous fiscal year.
Increase in the 2012 fiscal year was just because of increment in the daily and personal care
merchandises by 25 % and in ice-cream sector was by 8 %.
In Operating profit margin tells that operating profit margin increased by 2% in 2012 fiscal year.
According to the analysis of recent 5 previous fiscal years that operating margin increased in
2009 fiscal year but in 2010 fiscal year operating margin just decreased just because of some
negligence but in 2011 and 2012 fiscal years company maintain its operating profit margin. It
shows that operations manager performed well in 2011 and 2012 fiscal years. Higher the
earnings per share means company paid highly dividend to the shareholders. In 2012 fiscal year,
company increased its earnings per share ratio with respect to the previous fiscal year 2011.

45
Recommendations to the Problems:
These are the following suggestions or recommendations of the problems or hurdles faced on a
way to success by the Unilever Pakistan Limited as under;

That new product which is discussed above are offered in the marketplace but due to
some reasons the ratio of the new product offered success is not much for an
organization. An organization should noticed the reasons behinds the products or services
which is not so good like others products or merchandises of an organization. An
organization should check the procedures or processes of the product or quality standards
of the product and all those standards are applying on product during the work-in-process
procedure or production or manufacturing process. So, just because of that an
organization make our products or merchandises profitable.

Massive inventory in the form of raw-material and semi-finished or finished goods or


merchandises means high carrying cost or holding cost or possession cost incurred on it.
An organization cannot invest their capital in other projects or tasks or activities because
an organizations investment capital money pledge in the form of massive raw material
and finished goods or semi-finished goods. So, thats why an organization should apply
JIT (Just in Time) technique to keep inventory accordingly to make processes
productive. Because in JIT (Just in Time) technique, raw-material come in workplace
when needed. This technique has many advantages but one of them is the biggest that
advantage is the reducing the carrying or holding or possession cost incurred on the
material which is kept in the storeroom or warehouse in the form of inventory.

Firstly, Unilever Pakistan Limited faces many hurdles in a way to success so an organization
should always keep an eye on their procedures or always checked the worksheet of all the
processes of the product or quality standards of the merchandise and also all those standards are
applying on product during the work in process procedure or production or manufacturing

46
process. Secondly, there is another hurdle to success for company which is the huge amount of
inventory kept in warehouses in the form of raw material and semi-finished or finished products.
So, its means that high carrying cost or possession cost incurred on it. An organization must
apply JIT (Just in Time) technique to keep their inventory according to their desires. Because
JIT (Just in Time) technique is favorable for an organization in terms of reducing the carrying or
possession cost which is incurred on the inventory kept in the warehouse.

Bibliography & References:


These are the following bibliography and references that where I conduct our research data and
explain this research data in my own words;

https://www.unilever.pk/

http://exportpakistan.blogspot.com/2013/01/internship-report-unilever-pakistan.html

https://www.slideshare.net/RahulAuddya/unilever-supply-chain-management

http://uir.unisa.ac.za/bitstream/handle/10500/6141/2011%20MBL3%20Research%20Report%20
DA%20Woldemichael2.pdf?sequence=2

Lee, H.L., Billington, C., 1992. Managing supply chain inventory: pitfalls and opportunities.
Sloan Management Review 33 (3), pp. 65-73.

Lee, H.L. (2002), Aligning supply chain strategies with product uncertainties, California
Management Review, Vol. 44 No. 3, pp. 105-19.

Lee, L.L., Billington, C., 1995. The Evolution of Supply Chain Management Models and
Practice at Hewlett-Packard. INTERFACES25 (5), pp. 42-63.

SPEKMAN, R. E. and HILL, R., 1980, A strategy for effective procurement in the 1980s.
Journal of Materials Management, vol. 16, pp. 13.

47
SPEKMAN, R. E., KAMAUFF, JR, J. W. and MYRH, N., 1998, an Empirical Investigation into
Supply Chain Management: A Perspective on Partnerships. International Journal of Physical
Distribution and Logistics Management, Vol. 28, pp. 630650.

48

Вам также может понравиться