Unilever Inc.'s Chief Procurement Officer (CPO) and Company Overview
Unilever Inc.'s Chief Procurement Officer (CPO) is Dhaval Buch (Dhaval Buch, n.d). The company is a leader in the fast-moving consumer goods (FMCG) industry worldwide. Foods, personal care products, home care, and beverages are all areas of interest for Unilever. The company's headquarters are in London, United Kingdom, and it conducts business in the Americas, Europe, Asia, the Middle East, and Africa (Unilever SWOT Analysis, 2016). The company has worked to increase consumer happiness by producing high-quality items at competitive prices. This means that the organization must embrace economies of scale to lower the cost of production and distribution to maintain profitability, expand the market share, and stay competitive. Therefore, one of the primary goals of the Chief Purchasing Officer is to ensure sustainable sourcing for the benefit of the organization.
Unilever's Corporate Mission and Vision
Unilever's corporate mission is "to add vitality to life. We meet every day needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life."
The company's Vision statement is "to make sustainable living commonplace. We believe this is the best long-term way for our business to grow."
Dhaval Buch's Job Functions and Responsibilities
"The CPO directly supervises the Procurement Operations Director, the Procurement Services Director, and the Strategic Sourcing Director and is responsible through these positions and additional indirect reports for the smooth daily functioning and long-term success of Strategic Procurement Services" (Agreement, Ruth & Veit, 2013).
The following are the essential functions of the CPO in Unilever Inc.:
- Tasked with creating the company's purchasing strategy
- Building and maintaining a strong team in the department, to provide efficient and smooth operations
- Develop and implement tools for inventory management
- Manage and supervise other procurement departments in different parts of the world
- Creates and streamlines value for the firm's supply base
- Manages the corporation's business process and outsourcing functions
- Creates the company's strategic and tactical strategies in the purchasing department
- Supervises the purchasing functions in line with the company policies and state laws
- Analyses the applications and purchase order to ensure compliance with policies, laws, and ethics
- Trains and supervises staff in the department as a way of managing and improving skills and competencies
- Develop benchmarks to be utilized for quality improvement
- Managing department budgets to minimize possible overruns
- Ensures constant interaction with suppliers to monitor performance and contract administration
- Handles pricing negotiations and approves all the purchase orders and service contracts
- Works with the relevant departments to establish the purchase needs and specifications
- Promote, develop, and implement innovative methods to the purchasing function through the use of modern technology
- Develop and implement solid audit procedures to ensure successful audit results for the purchasing department
- Put in place results based processes to enhance efficiency in the department and inculcate a culture of cost effectiveness
- Enhance employee morale and relations in the department
- Identify and implement cost reduction opportunities in the organization
- Manage the company's procurement systems
Dhaval Buch's Educational Background
CPOs are part of upper management, so many organizations prefer people with business and administration backgrounds. However, since Unilever is a manufacturing entity, an engineering graduate fits the job description. Dhaval Buch has a Bachelor of Technology (Mechanical Engineering) from the Indian Institute of Technology. He joined the company in 1984 as a management trainee. On-the-job trainings offered by the corporation on pricing, suppliers, product distribution, and markets for years have enhanced his skills in procurement and supply chain management.
Professional Experiences
Chief Procurement Officer: Unilever (January 2014-Present)
Worked closely with suppliers and business leaders to aid in their value delivery systems to ensure customer needs are met
Restructured and improved global procurement by hiring highly skilled specialists and streamlining procurement strategies
Responsible for the company's entire procurement functions amounting to more than €30 billion annually
Implemented effective sourcing processes that lowered the costs of operation and enhanced operations in the organization
Leads a team of more than 1000 people that controls the company's supply chain
Developed and implemented a 5-year strategic plan for company demand and potential supply capacity
Senior Vice President Supply Chain: Unilever (2011-June 2014), Singapore
Organized, integrated, and aligned all purchasing resources within the company
Integrated the East African and Latin American supply chains into business units to meet the changing needs of the company
Reduced importation and logistics costs through effective supply tolling agreements
Executive Director: Unilever (Hindustan Unilever: 2006-2010)
Aligned work to remove redundancy hence delivered significant cost reductions; thus, surpassing business prospects
In 2007, received an award for exemplary business results
Replaced the legacy processes with the efficient automated procurement systems, eSourcing, and company policies to enhance performance in the organization
Eliminated wastage and supply shortages in the company
Personal Challenges
Challenges with Company Suppliers
The CPO has difficulties maintaining a steady and high-quality standard of supplies. Further, getting them to perform according to the expectation is quite challenging. For those reasons, Unilever works closely with its suppliers to minimize such occurrences.
Strategy Formulation and Changes
Increase in competition and the ever-changing customer needs and demands, procurement officers are compelled to implement strategies to reflect the changing business needs and to ensure company objectives are met. This is challenging for the company especially if implementation needs to be done across many geographical locations.
The Challenge of Cost Reduction
Cost reduction continues to be a major challenge for the CPO, yet it is a core mandate for the organization to maintain profitability. Cost minimization should be done year after year. It becomes a major challenge when the organization has growth prospects and costs of materials keep rising.
Influencing Internal and External Stakeholders
The CPO has the difficulty of collaborating and communicating with stakeholders, especially trying to convince them that early engagement with suppliers will save costs for the business.
Hiring, Retaining and Training Skilled Workforce
An effective, proactive, and resourceful team can be helpful while a group that lacks the necessary skills can be a big challenge. CPOs have difficulties selecting and retaining the right talent in the organization.
Job Achievements and Fulfillment
Drafted and implemented a value proposition for procurement that focused on cost reduction, improved customer service, and contractual compliance
Employed cost improvement methods (DEO) that achieved €10.3 billion worth of cost reductions
Enhanced customer satisfaction by 50% and 89% employee satisfaction since being appointed CPO
Implemented the "cradle-to-grave" contract management for the company
Lowered purchasing lead times by more than 48%
Maintained voluntary turnover below 5% annually
Attained savings of €400 million in the first year
Spearheaded the launch of Sustainable Palm Oil Policy that focused on halting deforestation, protecting peat land, and driving a positive social impact in order to transform the company's palm oil supply chain
Operational and Strategic Objectives of the Supply and Purchasing Department
Objectives guide the organization towards its mission and vision. The supply and purchasing department is a key section in the firm that ensures costs are minimized for the product to be bought and maintain demand. Therefore, this particular section of the company is guided by objectives that are aligned to the corporation's overall goals. The operational objectives are short-term while the strategic focus on the mid-term and long-term (Pooler & Pooler, 2012).
Strategic Objectives
These strategies focus on managing the procurement process efficiently and effectively on a long-term basis. Further, they pinpoint the opportunities for the purchasing team to add value, such as proper evaluation and selection of qualified suppliers based on company policies, standards, and ethical norms (Helmold & Terry, 2016). In addition, strategies identify the long-range issues affecting the department as well as the sourcing changes, thus reducing uncertainty. "Strategic goals are imperative for the firm to become proactive and predictive rather than reactive with short-term problem solving" (Pooler & Pooler, 2012).
The following are the company's strategic objectives:
- Selecting qualified suppliers and motivating them to perform to the expectations
- Be at the forefront to tapping supplier technological innovation
- Outline methods of solving supplier dispute and warranty problems
- Negotiating finances for growth and expansion
- Purchase at the largest quantity at the least cost possible
- Purchase the best quality at the best price
- Maintenance of good supplier-company relations
Operational Objectives
Operational objectives act like stepping-stones to the firm's strategic goals. They are the day-to-day or short-term operations that the department undertakes to meet the strategic objectives.
The following are the operational objectives:
- Ensure continuous flow of raw materials and services in the company
- Search for solid alternate sources of raw materials for the company
- Identification, evaluation, and selection of suppliers
- Forecasting and planning requirements
- Reviewing purchase forecasts and customer orders
- Daily stock checks to establish cycle
Alignment with Company Mission and Goals
The company's mission is "to add vitality to life and to meet the daily needs for nutrition, hygiene, and personal care with brands that help people feel good, look good, and get more out of life." Conversely, the vision is "to make sustainable living commonplace. The organization believes in sustainability as the best long-term way for its business to grow."
Therefore, Unilever's main goals are to enhance customer demand and satisfaction, focus on innovation and new product developments, augment scale of operations, and enhance its brand portfolio to sustain leadership in the market. According to the Unilever SWOT Analysis (2016) report, the firm is making significant acquisitions such as the Camay, REN Skincare, and the Zest brand in May 2015, which expanded the company's brand portfolio. In addition, the firm spends approximately $1.1 billion in R&D to enhance innovation, which accounts for new product developments. Unilever's strong brands span across more than 190 countries. Out of the 400 brands, 13 generate more than $1.1 billion in revenues annually. The purchasing and supplies department has ensured that the company continuously produces quality goods by employing strict measures of identifying, evaluating, and selecting suppliers. The department works closely with suppliers to ensure that the quality of supplies is maintained and they do not deviate from the contractual terms. Unilever Inc (2014) report indicates that the department has ensured that the company's raw materials are sourced sustainably to preserve the environment.
References
Agreement, N. I., Ruth, C., & Veit, M. (2013). Chief Procurement Officer. Retrieved from http://www.maine.edu/pdf/00022156.pdf, October 11 2017
Dhaval Buch. (n.d.) LinkedIn [Profile page]. Retrieved October 12. 2017, from https://www.linkedin.com/in/dhaval-buch-05833a2/
Helmold, M., & Terry, B. (2016). Global Sourcing and Supply Management Excellence in China. Singapur: Springer Verlag.
Pooler, D. J., & Pooler, V. H. (2012). Purchasing and supply management: Creating the vision. Springer Science & Business Media.
Unilever Inc. (2014).Sustainable Palm Oil Progress report 2014. Retrieved from https://www.unilever.com/Images/uslp-unilever-palm-oil-report-nov14_tcm244-424235_en.pdf. October 11. 2017
Unilever SWOT Analysis. (2016). Unilever SWOT Analysis [serial online]. November 3, 2016;:1-10. Available from: Business Source Premier, Ipswich, MA. Accessed October 13, 2017.
