Supply Chain Management (SCM) and Innovation at Unilever - CXOTalk - YouTube

Supply chain at an organization the size of  Unilever is complex and drives innovation for the  

whole company. We're speaking with Wendy Herrick,  the head of digital supply chain at Unilever.  

Wendy, tell us about supply chain at Unilever. Our integrated and connected supply chain  

is at the heart of our ability to make more than  77,000 SKUs and win in more than 190 countries  

across the globe. We capture the consumer demand  and we turn brilliant brand and product innovation  

into delivering high-quality products to  more than 2.5 billion consumers every day. 

Seventy-seven thousand SKUs, connect  that huge number to supply chain. 

We have 220 (and, in fact, 221, I believe)  owned factories and more than 3,300 discrete  

lines in which we run those products. But  it's not just our own factories. We also have  

more than 900 partnerships with collaborative  manufacturers as well, so it's a huge, huge job  

to deliver those products to our consumers. Now, you're head of digital supply chain.  

It's an interesting title and role. Tell  us what that means and what it encompasses. 

When you say the word "digital," people  always jump to the conclusion that it's  

all about technology, but we've  actually defined the role quite  

differently. Technology is just a piece of it. My role is overarching to the supply chain  

transformation program. Our digital  transformation is aimed at creating  

exponentially better customer and consumer  experiences across our end-to-end value network. 

My role specifically is all about the integration  and connectedness of it: connectedness of  

processes, of innovation, not just product  innovation but technology and partner innovation.  

It's really all underpinned. The most  important thing is future-fit talent. 

Wendy, you mentioned the broader  digital transformation at Unilever.  

Tell us about that to give us more context  for understanding supply chain and the  

value network you were just talking about. We went from knowing it all to learning it all,  

and that's one of our mantras. We  really needed to open our minds to  

what's possible and what's out there. We talked to more than, I think,  

100 different organizations, more than 30 or  40 different industries. We really did a lot  

of outside-in before we came to decide or define  what our transformation was going to be about. 

We defined it using what we call the three Ps. • What we mean by that is platforms, so those  

things that we're going to continuously  invest in—not only today but into the  

future—because we see it's where we can win. • Another P is around people, so that future-fit  

talent that I talked to, making sure we're  upskilling, and we have the right talent,  

right organization, and roles for the future. • Also, the right partners. We can't do this  

on our own, so whatever innovation is out there,  bringing those partners to the table and really  

making them an extension of our value network. I know you're working with Aera, and I'm  

grateful to Aera for making our conversation  possible. Where does Aera fit into this? 

We have the same passion and vision. We want to  build the self-driving – they call it enterprise;  

we call it consumer value network. In order  to do that, you need cognitive technology.  

With their experience, with Fred, Shariq, and  Kaushal (and the team there), they have a lot  

of experience, even in other technologies. When you talk about cognitive technology  

and the work you're doing with Aera, can you give  us some concrete examples to help us understand  

(sort of get under the surface a little bit) of  what that means and also why it's very important? 

When you start to look at your processes,  Michael, you sit there and look at those  

things which are non-value added, right? I think  of it in terms of, do I want to do that job  

every day? Where can we automate? You look across  all your processes and you start to look at  

those areas where you can automate. There's also predicting what's going  

to happen and prescribing what you can do. That  human in the loop is about making it visible.  

This is descriptive. This is what's  going to happen. Aera can do that. 

Then it's about predicting. It's about saying,  "I think you're going to struggle to provide  

that product to that customer, to customer A." That's human on the loop. What do you do? You're  

predicting something is going to happen and then  you expect the human in the loop to take action. 

Then there's that human out of the loop.  This is where Aera comes into play. 

I would say they do along the whole spectrum, but  this is where the intelligent right back. Once  

you're saying the human is out of the loop, you're  saying, "Look. For those decisions, just go." 

Imagine the speed on which you can act. Imagine  the job satisfaction you're creating for humans  

that actually now don't have to do that tedious  work. Also, the opportunities that you're taking  

advantage of because you're predicting and  prescribing what you actually need to do. 

Yeah, that pace of decision-making, it just  really requires a new way of working in this era,  

in the era we're in, the digital era,  and that's where Aera has helped us. 

Does it require a leap of faith or trust  that you're placing your supply chain,  

which is one of the crown jewels of  Unilver, in the hands of a machine? 

When we embarked on machine learning and AI  before, there are a number of arenas where  

it's a black box. Something comes out and  they predict that this is going to happen,  

but you don't truly understand  the black box, how it's thinking,  

and what's been put in that black box to take  that information to give you a prediction. 

With Aera, it's a clear box, so everything  that's there, you can follow the logic,  

the algorithms are there, and you can actually  then follow. If the human is still in the loop  

(human or machine), you can follow the audit  trail of the decisions that have been taken,  

all the actions that have been taken. Again, it's like treating this machine  

as part of your organization. They're part  of your org chart. It's really about being  

incredibly smart in where you do that and when  you trust it for those more complex decisions. 

Wendy, you've been describing the  digital transformation strategy. Now,  

what's the connection between that and  what you're doing with supply chain? 

It's actually underpinned by three strategic  focus areas. One is about agility. Everyone  

is talking about agility today, especially  during COVID. Agility for the changing market. 

Our consumers continuously, continuously change.  They say the rate of change will never be as  

slow as it is today, so agility for a changing  marketplace is one of those strategic areas. 

The other one is reshaping our costs and asset  base. How do we get quicker on innovation?  

How do we make the most use of our assets  that currently are in the business? 

Then the third one is about caring  for the people and planet. That caring  

for people and planet is front and center. Wendy, how much of this transformation involves  

technology and processes versus  the culture change aspects? 

Seventy-five percent of transformations fail  because of culture, so we took that very,  

very, very seriously. Culture doesn't happen overnight,  

but if you look at some of the technology today,  you can do that within three months. If you look  

at culture, it takes a much longer time and a  lot of effort and leadership in which to do that. 

I would say that culture has been really, really  critical. But also, the processes in technology  

are all part of that journey as well. What are the kinds of technologies that  

come into play? It's everything from digital twins to AR and VR,  

3D printing, AI and machine learning, and the list  kind of goes on and on. That's just to name a few.  

There's blockchain. There's just a lot out there. You really need to be, I would say, very choiceful  

in how you do that. Of course, you have the  technology for your ERP system and your basic  

transactions, but there's an incredible  amount of technology that's out there. 

You mentioned AI and machine learning. Where  does that come into play with supply chain? 

Absolutely critical, so even if you look  at the jobs of the future and what people  

want to be doing, they don't want to be working on  spreadsheets and doing the same job day in and day  

out every day. We want to create the jobs of the  future. We want to have the process of the future. 

When you start to segment your processes and your  decisions, there are some decisions that a machine  

can take an awful lot quicker than a human  and take in a lot more information. But then  

there are those decisions that are more complex  and really need that human in the loop there. 

Human out of the loop, the machine  can do just as good of a job.  

Then when it's in the loop, it's really in  between the two of them and how you basically  

segment your decisions in that sort of way. Wendy, the global pandemic has kind of wreaked  

havoc with supply chains. What has been the  impact on Unilever and how have you dealt with it? 

Alan Jope, our CEO, and the board really,  really stepped up very, very fast and focused us  

as an organization (supply chain or whatever  function that you're in) on five key areas. 

First and foremost was our  people, keeping our people safe. 

The second thing to focus on was about supply. We  make products that are critical to cleanliness,  

feeding people. The consumer needs our products,  so making sure that we could supply those products  

and get them to the marketplaces where they buy  them was absolutely critical. That was number two. 

The third thing was about staying close to the  demand. If you looked at where demand shifted to,  

everyone talks about e-comm. Of course,  it shifted to e-comm. It was exploding.  

No matter where you went, it was e-comm. We also saw other consumer shifts. There was more,  

you know, "Could you buy toilet paper or  paper towels during the pandemic?" [Laughter]  

People were kind of big basket shopping and  going once every two weeks versus going three  

times a week – that sort of thing. We were looking at shopping habits,  

but we also looked at cocooning. People started  to cook at home, but then you saw a real uptick in  

other parts of our food business and in our beauty  and personal care: Dove, the soap, and everything  

we did there. Actually, in six weeks, we started  making hand sanitizer like you would not believe  

to really, really help across that demand. Keeping our ear to the ground there,  

we went to cycles that were unbelievably  fast. When you sit there and say, "Well,  

we have a four-week S&OP cycle," we went to  days and, in some instances, in hours. We  

went to S&OP lite where we could really do it  at speed. We went from really what I call batch  

sort of planning to concurrent planning. Then it was all about giving back in the  

communities in which we live and work: donations,  working with our partners to make ventilators at  

break net speed to help frontline workers. I could  go on and on in that space, but really, really  

supporting the communities in which we live  and work was very, very important to us. 

Wendy, as we finish up, I'd like to ask you  to share advice for business leaders who are  

listening. How can business leaders  overcome the challenges and the complexity  

of undertaking this kind of supply chain  transformation that you've been describing? 

I think it's really important to focus  on the problems you're trying to solve.  

I think it's really important to put the  consumer at the center of your processes  

and what you're trying to do and to deliver. Everyone talks about transformation and,  

of course, we've been on that journey as well, but  we're never going to go back to not transforming.  

Really, we're starting to think about this isn't  about a one and done. It's not about a start  

and an end, and we've transformed now. It's  about what we like to call serial innovation,  

and innovation not just in the product sense—which  we've always had and we've referred to it in the  

past—but it's about serial innovation to make sure  that you continue to win in the marketplace and,  

I would say, make sustainable living commonplace. Okay. Wendy Herrick, head of digital supply  

chain at Unilever, thank you for  taking time to speak with us today. 

Michael, it was a pleasure. I really, really  enjoyed talking to you today. Thank you very much.