Consumer Goods

Case Study: Flavors and Fragrance Producer

This case study focuses on the integration between a global flavors and fragrances producer and Unilever BestFoods Europe through the e4us supplier portal application using UCC-XML v 1.1 messaging. It excludes any financial settlement elements. It is a forecast-based vendor-managed inventory (VMI) scenario with made-to-order products, significant lead times, and weekly workflow.
Business Challenge

UnileverIn 2004, the supplier was given a great opportunity to deepen its partnership with Unilever. The company was asked to be one of the first ingredient suppliers to integrate with the e4us platform of Unilever BestFoods Europe. The combination of expertise in VMI, ease of use of the TIE solution, and short implementation times led to the selection of TIE to lead this implementation.
Solution

Determined to make this a true win-win situation, the supplier and TIE embarked on a detailed study of ordering and delivery patterns per supply relationship. This was combined with a simple cost model which quantified the trade-offs between stocks, drop sizes/delivery frequencies, and transactional costs. This analysis allowed the supplier to focus clearly on those areas where benefits could be gained. It also became clear during the analysis that some iterations might be necessary before the optimal process was designed.

Building on the thorough process analysis, negotiations of the business rules were fact-based and fair, leading to short-term benefits for both parties in terms of delivery frequency, while providing overall lower costs in the supply chain. To follow the design rules supporting the implementation, TIE technology enabled fast customization ensuring that benefits would occur in the day-to-day replenishment process.

Key customer-facing interfaces were implemented, allowing for flexibility in the back-office applications. This was critical due to the continuous improvement of existing internal processes. Manual workload was minimized using some user-friendly alternatives.

Using only a browser, users were trained on the process and application interface in one day. Once the process was stabilized, further improvements were sought by interfacing the customer planning information with SAP-APO for longer term planning as well as interfacing with SAP/R3 to reduce manual workload and errors.
Results

Sequentially, the following results have been achieved within a one-year timeframe:

• Pilot implementation in one month
• Trained a self-supporting user base within weeks of implementation
• Negotiated and implemented full VMI process for 15 relationships within six months
• Interfaced with SAP-APO and SAP/R3
• Increased overall visibility throughout the supply chain
• Full exception based handling system in place (including master data and workflow)
• Overall supply chain cost reduction through a balanced view of inventory costs, transportation cost, and more reliable forecast information
• Recognition from Unilever on professionalism of implementation tools
• Strengthening of the relationship between all parties