Unilever's chief purchasing officer

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 Corporation conducts business throughout the United States, Europe, Asia, the Middle East, and Africa. Its main office is in London, United Kingdom (Unilever SWOT Analysis, 2016). The company has worked to increase consumer happiness by producing high-quality items at competitive prices. It implies that in order to reduce production and distribution costs, the company must adopt economies of scale. As a result, it will 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 benefits of the organization.

The 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 it 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. He/ she 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.

Dealing with creating the Company’s purchasing strategy.

Building and maintaining a strong team in the department in order to provide efficient and smooth operations.

Developing and implementing tools for inventory management.

Managing and supervising other procurement departments in different parts of the world.

Creating and streamlining values for the firm’s supply base.

Managing the Corporation’s business process and outsourcing functions.

Creating the company’s strategic and tactical strategies in the purchasing department.

Supervising the purchasing functions in line with the company policies and state laws.

Analyzing the applications and purchase in order to ensure compliance with policies, laws and ethics.

Training and supervising the staff in the department as a way of managing and improving skills and competencies.

Developing the benchmarks to be utilized for quality improvement.

Managing department budgets to minimize possible overruns.

Ensuring constant interaction with suppliers to monitor performance and contract administration.

Handling pricing negotiations and approving all the purchase orders and service contracts.

Working with the relevant departments to establish the purchase needs and specifications.

Promoting, developing and implementing the innovative methods to the purchasing function through the use of modern technology.

Developing and implementing solid audit procedures to ensure successful audit results for the purchasing department.

Putting in place the results based processes to enhance efficiency in the department and inculcating the culture of cost effectiveness.

Enhancing employees’ morale and relations in the department.

Identifying and implementing cost reduction opportunities in the organization.

Managing the Company’s procurement systems.

Dhaval Buch’s Educational Background

CPOs is part of the upper management. Thus, 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 Indian Institute of Technology. He joined the company in 1984 as a management trainee. The 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 the suppliers and business leaders to aid in their value delivery systems to ensure customers’ needs are met.

Restructured and improved global procurement by hiring highly skilled specialists and streamlining procurement strategies.

Was responsible for the Company’s entire procurement functions amounting to more that € 30 billion annually.

Implemented the effective sourcing processes that lowered the costs of operation and enhanced operations within the organization.

Led the team of more than 1000 people that controls the Company’s supply chain.

Developed and implemented a 5-year strategic plan for the Companys demands and potential supply capacities.

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 the importation and logistics costs through effective supply tolling agreements.

Executive Director: Unilever (Hindustian Unilever: 2006-2010)

Aligned work to remove redundancy hence delivered significant cost reductions, thus, surpassed business prospects.

In 2007, received the award for exemplary business results.

Replaced the legacy processes with the efficient automated procurement systems, eSourcing, and the Company’s policies to enhance performance within the Organization.

Eliminated wastage and supply shortages in the Company.

Personal Challenges

Challenges with Company’s 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

The increase in competition and the ever-changing customers’ needs and demands, procurement of the officers are compelled to implement the strategies to reflect the changing business needs and to ensure that the Company’s objectives are met. It is challenging for the Company especially if the 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 the 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 the stakeholders, especially trying to convince them that early engagement with the suppliers will save costs for the business.

Hiring, Retaining and Training Skilled Workforce

An effective, proactive, and resourceful team can be helpful while the 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 the value proposition for the procurement that focused on cost reduction, improved customers’ service and contractual compliance.

Employed cost improvement methods (DEO) that achieved € 10.3 billion worth of cost reductions.

Enhanced customers’ satisfaction by 50% and 89% of employees’ 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 the Sustainable Palm Oil Policy that focused on halting deforestation, protecting peat land, and drive positive social impact in order to transform the Company’s palm oil supply chain.

Operational and Strategic Objectives of the Supply and Purchasing Department

The objectives guide the Organization towards its mission and vision. The supply and purchasing department is the key section in the firm that ensures that the costs are minimized for the product to be bought and maintain demand. Therefore, this particular section of the Company is guided by the objectives that are aligned to the Corporation’s overall goals. The operational objectives are short-term, while the strategic focus is put 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 the values such as proper evaluation and the selection of qualified suppliers based on the Company’s policies, standards and ethical norms (Helmold & Terry, 2016). In addition, the 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.

Bing at the forefront to tap suppliers’ technological innovations.

Outlining methods of solving suppliers’ dispute and warranty problems.

Negotiating finances for growth and expansion.

Purchasing at the largest quantity at the least cost possible.

Buying the best quality at the best price.

Maintaining 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 in order to meet the strategic objectives. It includes the following.

Ensuring continuous flows of raw materials and services of the Company.

Searching for solid alternate sources of raw materials for the Company.

Identifying, evaluating and selecting suppliers.

Forecasting and planning requirements.

Reviewing of purchase forecasts and customers’ orders.

Daily stocking checks to establish cycle.

How the Objectives Mentioned above Align with the Company’s 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 the sustainability as the best long-term way for its business to grow.”

Therefore, the Unilever’s main goals are to enhance customers’ demands and satisfaction, to focus on innovations and new product developments, to augment scale of operations, and to enhance its brand portfolio in order to sustain leadership in the market. According to Unilever SWOT analysis report (2016), the Firm is making significant acquisitions such as the Camay, REN Skincare, and the Zest brand which expanded the Company’s brand portfolio in May, 2015. In addition, the Firm spends approximately $ 1.1 billion in R&D to enhance innovations which accounts for new product developments. The 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 the suppliers to ensure that the quality of supplies is maintained and they do not deviate from the contractual terms. Unilever Inc. report (2014) 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

Dhaval Buch. (n.d.) LinkedIn [Profile page]. Retrieved 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. Luxemburg: 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.

Unilever SWOT Analysis. (2016). Unilever SWOT analysis [serial online]. Retrieved from https://managementstudyguide.com/swot-analysis.htm