Unilever 2011 Annual Report Download - page 33

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RISKS continued
Description of risk What we are doing to manage the risk
Supply Chain
Our business depends on securing high quality materials, efficient We have contingency plans designed to enable us to secure
manufacturing and the timely distribution of products to our alternative key material supplies at short notice, to transfer or share
customers. production between manufacturing sites and to use substitute
materials in our product formulations and recipes.
Our supply chain network is exposed topotentially adverse events
such as physical disruptions, environmental and industrial accidents These contingency plans also extend to an ability to intervene directly
or bankruptcy of a key supplier which could impact our ability to to support a key supplier should it for any reason find itself in difficulty
deliver orders to our customers. or be at risk of negatively affecting a Unilever product.
The quality and safety of our products are of paramount importance We have policies and procedures designed to ensure the health and
for our brands andour reputation. safety ofour employees and the products in our facilities and to deal
withmajor incidents or crises including business continuity and
The cost of our products can be significantly affected by the cost of disaster recovery.
the underlying commodities and materials from which they are
made. Fluctuations in these costs cannot always be passed on to the Our product quality controls are extensive and are regularly tested to
consumer through pricing. ensure that they are effective. All of our key suppliers areperiodically
reviewed to ensure they meet the rigorous quality standards that our
products demand.
Commodity price risk is actively managed through forward-buying
oftraded commodities and other hedging mechanisms. Trends are
monitored and modelled regularly and integrated into our forecasting
process.
Systems and Information
Unilever’s operations are increasingly dependent on IT systems and Hardware that runs and manages core operating data is fully backed
the management of information. up with separate contingency systems to provide real time backup
operations should they ever be required.
We interact electronically with customers, suppliers and consumers
in ways which place ever greater emphasis on the need for secure We maintain a system of control at all times for access to our
and reliable IT systems and infrastructure and careful management important information.
of the information that is in our possession.
Our policies on data access, privacy and protection of information are
This also increases the threat from unauthorised access and regularly reviewed and our employees are trained to understand the
misuse of sensitive information. requirements.
Business Transformation
Successful execution of business transformation projects is key to All acquisitions, disposals and global restructuring projects are
delivering their intended business benefits and avoiding disruption sponsored by a Unilever Leadership Executive member. Regular
to other business activities. progress updates are provided to the Unilever Leadership Executive.
Unilever is continually engaged in major change projects, including Sound project disciplines are used in all merger, acquisitions and
acquisitions and disposals, to drive continuous improvement in our restructuring projects and these projects are resourced by dedicated
business and to strengthen our portfolio and capabilities. and appropriately qualified personnel.
In 2011, this included several significant acquisitions (Alberto Culver, Unilever also monitors the volume of change programmes underway
Concern Kalina), IT system implementations, the roll-out of in an effort to stagger the impact on current operations and to ensure
Enterprise Support and changes to our management organisation. minimal disruption.
Unilever Annual Report and Accounts 2011
Report of the Directors About Unilever