Strong Source Episode 15 with Willem Uijen
Sep 16, 2024
Willem Uijen, Chief Procurement Officer at Unilever, brings over 25 years of experience in global supply chain and procurement. He dives into the challenges of managing a $40B procurement spend, discussing sustainability and the impact of price volatility on brands. Willem emphasizes the importance of balancing supply security with price stability, shares insights on cocoa market dynamics, and highlights Unilever's commitment to sustainable practices. He also reflects on attracting talent in procurement and the need for greater transparency in supply chains.
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Commodities Drive Unilever's Cost Base
- Over half of Unilever's direct materials and packaging spend is commodity-linked, creating large exposure across palm, aluminium, cocoa, sugar, dairy and energy.
- Procurement's core role is to secure supply and provide price stability that enables brand investment.
Structure Procurement Around Business And Portfolios
- Organize procurement by business groups with dedicated CPOs while keeping cross-portfolio teams for categories like palm and logistics.
- Centralize commodity risk management as a standalone function to align strategy and execution across groups.
Hedge To The Pricing Horizon
- Unilever uses a pricing horizon to determine how far to hedge prices and aims to be covered for that period to give the business P&L stability.
- CRM tracks coverage versus consumption and value-at-risk to decide tactical cover beyond the horizon.
