Unilever 2015 Annual Report Download - page 62

DESRIPTION OF RISK WHAT WE ARE DOIN TO MANAE THE RISK
USTOMER RELATIONSHIPS
Successful customer relatonshps are vtal to our busness and
contnued growth
Mantanng strong relatonshps wth our exstng customers and
buldng relatonshps wth new customers who serve changng
shopper habts are necessary to ensure our brands are well
presented to our consumers and avalable for purchase at all tmes
The strength of our customer relatonshps also affects our ablty
to obtan prcng and compettve trade terms Falure to mantan
strong relatonshps wth customers could negatvely mpact the
terms of busness wth the affected customers and reduce the
avalablty of our products to consumers
We buld and mantan tradng relatonshps across a broad
spectrum of channels rangng from centrally managed
multnatonal customers through to small traders accessed
va dstrbutors n many developng countres We dentfy changng
shopper habts and buld relatonshps wth new customers, such as
those servng the e-commerce channel
We develop ont busness plans wth our key customers that
nclude detaled nvestment plans and customer servce obectves
and we regularly montor progress
We have developed capabltes for customer sales and outlet
desgn whch enable us to fnd new ways to mprove customer
performance and enhance our customer relatonshps We nvest
n technology to optmse order and stock management processes
for our dstrbutve trade customers
TALENT & ORANISATION
A sklled workforce and agle organsaton are essental for the
contnued success of our busness
Our ablty to attract, develop, organse and retan the rght number
of approprately qualfed people s crtcal f we are to compete
and grow effectvely
Ths s especally true n our key emergng markets where there
can be a hgh level of competton for a lmted talent pool The loss
of management or other key personnel or the nablty to dentfy,
attract and retan qualfed personnel could make t dffcult to
manage the busness and could adversely affect operatons and
fnancal results
Resource commttees have been establshed and mplemented
throughout our busness These commttees have responsblty
for dentfyng future sklls and capablty needs, developng career
paths and dentfyng the key talent and leaders of the future
We have an ntegrated management development process whch
ncludes regular performance revews underpnned by a common
set of leadershp behavours, sklls and competences
We have targeted programmes to attract and retan top talent
and we actvely montor our performance n retanng talent
wthn Unlever
We regularly revew our ways of workng and organsaton structures
to ensure that we drve speed and smplcty through our busness to
reman agle and responsve to marketplace trends
SUPPLY HAIN
Our busness depends on purchasng materals, effcent
manufacturng and the tmely dstrbuton of products
to our customers
Our supply chan network s exposed topotentally adverse
events such as physcal dsruptons, envronmental and ndustral
accdents or bankruptcy of a key suppler whch could mpact
our ablty to delver orders to our customers
The cost of our products can be sgnfcantly affected by the cost
of the underlyng commodtes and materals from whch they
are made Fluctuatons n these costs cannot always be passed
on to the consumer through prcng
We have contngency plans desgned to enable us to secure
alternatve key materal supples at short notce, to transfer
or share producton between manufacturng stes and to use
substtute materals n our product formulatons and recpes
These contngency plans also extend to an ablty to ntervene
drectly to support a key suppler should t for any reason fnd tself
n dffculty or be at rsk of negatvely affectng a Unlever product
We have polces and procedures desgned to ensure the health
and safety ofour employees and the products n our facltes, and
to deal wthmaor ncdents ncludng busness contnuty and
dsaster recovery
ommodty prce rsk s actvely managed through forward buyng
oftraded commodtes and other hedgng mechansms Trends are
montored and modelled regularly and ntegrated nto our
forecastng process
SAFE AND HIH QUALITY PRODUTS
The qualty and safety of our products are of paramount
mportance for our brands and our reputaton
The rsk that raw materals are accdentally or malcously
contamnated throughout the supply chan or that other product
defects occur due to human error, equpment falure or other
factors cannot be excluded
Our product qualty processes and controls are comprehensve,
from product desgn to customer shelf They are verfed annually,
and regularly montored through performance ndcators that drve
contnuous mprovement actvtes Our key supplers are externally
certfed and the qualty of materal receved s regularly montored
to ensure that t meets the rgorous qualty standards that our
products requre
In the event of an ncdent relatng to the safety of our consumers
or the qualty of our products, ncdent management teams are
actvated n the affected markets under the drecton of our product
qualty, scence, and communcatons experts, to ensure tmely and
effectve market place acton
55Unilever Annual Report and Accounts 2015 Governance