Unilever 2012 Annual Report Download - page 25

22 Unilever Annual Report and Accounts 2012Report of the Directors About Unilever
WINNIN THROUH ONTINUOUS IMPROVEMENT continued
Local relevance wth low-cost
busness models
One of Unilever’s particular strengths
is our ability to combine global scale
with locally tailored solutions. We have
identified several levers to improve our
gross margin over the long term, one
of which is the application of ‘low-cost
business models’ to parts of the business
such as laundry. We expect a significant
profitability uplift once these measures
are implemented, enabling us to invest
back into the business, maintaining and
accelerating the momentum of the
virtuous circle of growth.
Workng n partnershp wth our supplers
Our scale also helps us to meet our
ambitious targets for sustainable sourcing.
In 2012, we sourced around one third of
all agricultural raw materials sustainably,
including 100% of our palm oil, our largest
agricultural raw material, three years
ahead of schedule. Elsewhere, 39% of
all the tea we source comes from farms
certified by the Rainforest Alliance.
Sourcing sustainably means that farmers
can improve their living conditions and
earn an income they can live on. It also
helps maintain and improve soil fertility,
enhance water quality and availability,
and protect biodiversity.
However, we cannot achieve our
sustainable growth agenda alone. We
work in partnership with our suppliers to
support the growth and innovation we need.
Through our ‘Partner to Win’ programme,
we work with more than 150 strategic
suppliers by sharing strategies and growth
plans. This enables us to build capacity
and create new technologies. Our suppliers
are also key to generating new ideas and
are partnering with us on over 65% of the
deliverables in our medium and long-term
innovation projects.
Improvng eco-effcency
We are also focusing on improving
sustainability in our manufacturing
network. Thanks to programmes to
reduce, reuse, recycle and recover,
over half our manufacturing sites now
send zero non-hazardous waste to landfill.
We sourced 26% of our energy used in
manufacturing from renewables, and
reduced our CO2 emissions from energy by
838,000 tonnes in the period 2008 to 2012.
These efforts have contributed towards the
recognition by the Dow Jones Sustainability
Indexes, which named Unilever a global
super-sector leader in 2012.
Reachng more consumers
To meet our growth ambition we need
to reach more consumers. We continue
to work hard to ensure our products are
always available wherever the consumer
is shopping.
To reach different kinds of consumers we
have developed segmented supply chains
across categories, portfolios, geographies
and channels to deliver the right service
at the right cost. For example, in Indonesia,
Pond’s is a premium brand that’s often
sold by small specialist retailers with little
space to showcase the entire range and as
a result they have a tendency to run out of
stock. Following a successful trial, we now
offer a daily delivery service, extending the
roll-out to Greater Jakarta – experiencing
sales growth of more than 80%.
We have been increasing on-shelf
availability (OSA), getting more products
more quickly on to shelves. In 2012, stores
in our OSA programme reduced empty
shelves by 13%.
In 2012, our customers rated us higher
than ever before. According to the global
Advantage Group Survey, we improved in
70% of our key markets and are in the top
third in ten out of 14 of our key markets.
We are also working hard to increase
product quality – reducing both complaints
and incidents. Consumer complaints
were down by 29% in 2012 versus 2009,
while product incidents were down by
75%. In addition, we are making and
designing better products. In 2012, 57%
of our products scored higher than our
competitors’ in blind tests, compared
to just 21% in 2009.
Fast, flawles ss executon
Our ability to deliver quality products,
innovate, and make better decisions
quickly is critical to our sustainable
growth agenda. For example, we have
almost halved the time it takes to launch
key innovations into the market place.
New capabilities and centralised
processes are making it possible to
almost halve the time it takes to build new
factories. Unilever’s Global Engineering
Services uses ‘cookie cutter’ templates for
factories, design and suppliers, helping us
to deliver consistent high quality products
wherever in the world they are made, as
well as improving our speed to market.
We are also investing for growth and
are building world-class factories,
enabling us to cater to the substantial
volume growth so far. As well as
increasing capacity and flexibility,
our new plants create competitiveness
through manufacturing excellence
and by using sustainable technologies.
ZERO WASTE
TO LANDFILL
Over half of our 252 manufacturing sites across
the world, from Costa Rica to Japan, send no
non-hazardous waste to landfill, up from 74 at
the start of the year. 100% of our sites send zero
waste to landfill in 18 countries, the equivalent of
removing over 1 million household bins of waste
every year. This has been achieved by eliminating
waste in the factories. We also reduced, reused,
recycled and recovered waste. For example, in
Russia, Unilever recycles tea bags to make animal
bedding or wallpaper.
More at wwwunlevercom/sustanable-lvng