Unilever 2011 Annual Report Download - page 19

16 Unilever Annual Report and Accounts 2011
Report of the Directors About Unilever
WINNING THROUGH
CONTINUOUS IMPROVEMENT
Small actions can make a big difference. Our focus on operational
excellence – doing everything better, every day – is bringing consumers
better quality and service, while substantial savings and better
environmental performance are ensuring that growth is truly sustainable.
Lean, responsive, consumer-led
Consumer needs are changing and
developing rapidly. To continue to meet
them, we must take things we already
do well – like high quality products
and excellent service – and do them
even better, faster and more efficiently.
Better quality
Almost a century ago, Lever Brothers
offered consumers a £1,000 reward if
they could show that their soap was
anything less than ‘perfectly pure,
genuine and unadulterated’. Consumer-
perceived quality driving sustainable
growth remains at the heart of Unilever
today. We are systematically improving
the quality of our products. In 2011,
consumer complaints per million units
fell by 19% and product quality incidents
more than halved.
For example, we listened to feedback
from consumers about Lifebuoy soap,
and improved its fragrance and bar
structure, resulting in a 0.8% market
share growth in the global skin
cleansing market in 2011.
Better choice
Through our on-shelf availability (OSA)
programme, we work with retailers to
improve our service to them, and their
service to the shopper – making our
products available more of the time.
In 2011, stores in our OSA programme
reduced empty shelves by 27%. We are
expanding this programme to other
customer channels and geographies.
Better service
Our supply chain combines the
advantages of global scale with local
agility. Our reach, particularly in
emerging markets, is a significant
competitive advantage, and we are
constantly seeking ways to differentiate
our supply chain. In 2011, for example, in
Indonesia we created a dedicated supply
chain for a selection of beauty products
that more than doubled our sales for
these products.
And when floods hit Thailand, our teams
moved quickly to protect our people,
factories and stocks – carrying our
products directly to customers’ shops.
Unilever Thailand was ranked number
one in the Advantage 2011 Customer
Satisfaction Survey.
Agile and cost-competitive
We are making our operations more
responsive to changes in demand,
enabling us to optimise our capital
investment, launch products more
quickly and win market share. In 2011,
for example, we delivered on our
objective to increase the speed of factory
building, saving up to 25% of build time
on large factories (see picture story on
page 17). Meanwhile, we never lose sight
of the importance of reducing costs and
conserving cash.
Better margins
We look for improvements at every link
in the value chain. Wherever we find
savings, we aim to replicate them.
This philosophy helped us to deliver
record savings of €1.3 billion in 2011.
Managing cash
We continued to have negative working
capital in 2011 and aim to bring stocks
down further in the future through
continuous improvement of our business
planning processes.
Partnerships with suppliers
We spent well over €30 billion on goods
and services in 2011, and our suppliers
are vital partners in our sustainable
growth ambitions. We work with them to
create better, faster innovations – and our
suppliers are investing up to €1.3 billion to
guarantee capacity for our future growth.
In line with our commitments in the
Unilever Sustainable Living Plan, we
increased the amount of agricultural
raw materials obtained from sustainable
sources.
€6.1 billion
spent on advertising
and promotion in 2011
No.1
in customer satisfaction
survey in Thailand
DRIVING DOWN COSTS, IMPROVING MARGINS
Our market-leading washing powder, Wheel, has
seen margins improve in India through our low cost
business model (LCBM) approach, which optimises
margins at every link in the value chain. For Wheel,
LCBM included improvements in trade terms and
advertising budgets as well as in the manufacturing
and distribution network – upgrading the range of
our existing factories.