The supply chain function at this firm includes everything from purchasing through manufacturing to logistics and distribution,’ says Ian Midgley, chief supply chain officer at Unilever. ‘The context I work in is one of supply chain transformation and efficiency. The past seven or eight years has encompassed all the familiar strategies that firms are using around the world – restructuring manufacturing, globalisation of procurement, business process rescaling, outsourcing and introducing a lot of e-technology, especially in procurement.Whatever the strategy, we have been experimenting and implementing – and with some good results.
‘We have reached a point at which I can definitively state there is no silver bullet for the supply chain,’he adds. ‘We have entered an era in which it isn’t just about outsourcing or IT. To get where we need to be.We realise that stepping up our supply chain performance further is aboutmaking sure our approach is carefully crafted to fit our brand and our customers’requirements.
No silver bullet
‘Why should the supply chain strategy for ice cream in Asia be the same as that for laundry in Europe? The game we have to learn is forgetting the search for the silver bullet – it’s all about crafting, designing and executing supply chains tightly to the needs of different product categories, brands and customers.’
As Midgley points out, even in the fast-moving consumer goods space there are fast and slow-growing brands andmarkets. Some are vulnerable to commodity prices and need serious action on efficiency while in other areas theremay be rapid product developments that require technical and resource inputs.
‘It’s about getting the blend right across segments of the business,’he says. ‘The supply chain is getting closer to the brands. But we now see it as crucial to ensure that the supply chain is close to brand development on one hand and to the customer on the other.We’ve done a lot of what we needed to do in building the internal efficiency of our supply chain but future value delivery won’t be like that.’
For example, Midgley says Unilever has taken great care to ensure its supply chain is fully deployed in every major brand leadership and critical project team. ‘We have to build the brand supply chain strategy and execution at the same time as the brand plan itself,’ he says. ‘Doing it as an add-on leads to frustration, unfeasible timings and unmanageable resource implications.’But how do you achieve this? ‘First off, you have to be in the right place at the right time, that is, at the business planning stage,’Midgley says. ‘An important point in large companies is to ensure that supply chain accountabilities are designed so people have the time and space to do this. If your supply chain people are all too busy driving operations, they won’t be able to see what the rest of the business is doing.
Going against the grain
‘This goes against the grain, but it is essential that there are people who have time and energy to represent the supply chain in the business planning process.’
Surely this requires an unusual set of skills? ‘We see these as important developmental roles, in which people are able to step outside everyday supply chain pressures,’ says Midgley. ‘It isn’t right for every supply chain professional but there are those for whom it is an excellent opportunity.’
The days of addressing geographical issues by parachuting in ex-pats are long gone at Unilever.
‘That isn’t the way we look at it,’ says Midgley. ‘We have worldwide operations and we no longer segment the supply chain world in terms of developed and developing countries. Some of our bestmanufacture is in Brazil, exemplars of customer service can be found in the Far East; some of our best technologists are in India and we have experience of a UK factory beingmanaged by a professional froma so-called developing nation’.
If there is an elephant in the room for Midgley, it is sustainability. ‘The world population will be nine billion in 30 years’ time compared with 6.5 billion today.We are already seeing competition for resources – that’s what the spike in commodity prices is about. Sustainability is going to be centre stage for supply chain professionals in this challenging world.
‘How we respond to the pressures of population growth, energy efficiency, use of water, sustainable agriculture and so on will be the defining challenge in the next few decades,’he adds. ‘How we do this is not an add-on to our supply chain work – it is our work.’
Ian Midgley joined Unilever in 1977 having completed a chemistry degree at Oxford University.
He initially spent six years with Elida Gibbs as a productionmanagement trainee before taking a series of factory management jobs. He followed this with several assignments across Unilever includingmanufacturing director at Unilever Zaire and supply chain strategy leader at Lever Europe.
In 1992, he set up the global sourcing group and led a series of reviews of detergentmanufacturing strategy in the Far East, Latin America and the Middle East. After a short spell as head of corporatemanufacturing, he was appointed senior vice president supply chain for the Latin America business group in 1997 where he ledmajor regional transformation.
FIRST SUPPLY CHAIN OFFICER
In 2001, Midgley was appointed senior vice president supply chain for the home and personal care half of Unilever, leading to his appointment as the firm’s first chief supply chain officer, responsible for functional leadership across the whole business, in 2005.