Why Unilever Built a Replica of its Entire Supply Chain

Unilever is certainly no stranger to innovation and is constantly coming up with ingenious ways to enhance its operations.
The latest example comes in the form of its ‘operations metaverse’ – a first-of-its-kind digital replica of Unilever’s entire supply chain, aimed at optimising efficiency and empowering collaboration between human and machine.
This groundbreaking approach was recently unveiled in a new report produced by the supply chain intelligence company, Zero100, which details Unilever's four-year journey to autonomous operations while emphasising the imperative role of human expertise.
The collaborative report, entitled Welcome to the Operations Metaverse: Unilever's Path to 100% Digital, offers a roadmap for companies seeking to revolutionise their supply chains through end-to-end digital transformation.
Digitising the end-to-end value chain
Unilever’s journey towards autonomous operations began with a complete overhaul of its supply chain structure.
By breaking down silos and integrating demand and supply value chains, the company developed a holistic view of its operations.
Additionally, by centralising and digitising key end-to-end business processes, Unilever is laying the groundwork for an early-stage operations metaverse. In this evolving environment, virtual analysis, choices and decisions are beginning to influence real-world changes within the physical supply and demand ecosystem.
“We’re on an exciting journey to digitise and optimise Unilever’s complete end-to-end value chain,” explains Juan Carlos Parada, Global Head of Customer Operations at Unilever.
“Now, four years into our transformation, our value chain, business process, organisation and tech stack span from demand creation, planning and fulfilment through to customer service and claims. Combined with our ecosystem of retail customers, software solutions providers and business process service partners, we are reinventing end-to-end planning and execution.
“I believe we’ve built the cornerstone of an operations metaverse where, by centralising and digitising key end-to-end business processes, we’re enabling analyses, choices and decisions made in the virtual world to drive change to the physical supply and demand ecosystem in the real world – on a global scale and at a much greater speed.”
Delivering business value
The results of Unilever’s digital transformation have been significant. Its new customer operations function, responsible for digitising the customer-facing value chain, is on track to deliver significant value for the business through turnover increase, cost savings and cash generation by 2026.
These results have been powered by the realisation of a new operating model, now implemented in markets that cover more than 75% of Unilever’s total turnover, and the creation of global hubs which enable process standardisation and digitisation at scale.
One of the FMCG giant’s biggest initiatives powering the metaverse is an AI-powered ‘customer connectivity’ model for collaborative planning with retail partners. Aimed at establishing a single, integrated supply chain with customers, this proprietary model connects customer point-of-sale (POS) data and stock information to the Unilever supply system, with an AI overlay that assesses and replans in real-time and at a previously unattainable scale and speed.
An initial pilot with a major retailer in Mexico significantly increased on-shelf availability, resulting in improved in-store execution to better serve Unilever consumers and drive strong category sales growth. The programme is now being rolled out globally across 30 of its largest modern trade customers in less than 18 months.
Juan Carols continues: “As we continue to virtualise our end-to-end operations, we intend to create a fully-integrated digital ecosystem where different ‘actors’ – our supply chain team, operational hubs, customers, sensors and digital agents – can transact and interact. Fostering collaboration, efficiency and resilience remains our priority as we drive our world class supply chain towards more autonomous operations in the future.”
A human + machine approach
Zero100’s report highlights Unilever’s path towards building teams where humans and machines collaborate closely.
As noted by Juan Carlos, who spearheaded the transformation, having autonomous operations does not mean without human intervention.
“We’re moving into an environment of industry-leading operational excellence where meaningful portions of the work are being automated, guided by people,” he says.
“It’s an opportunity. We’re freeing up people to focus on more strategic, value-adding activities. The technology does the heavy lifting of what has historically been more repetitive tasks, so the quality of the human work shows up in more impactful and creative ways.”
Recognising that automation will change the role of humans working in the supply chain space, Unilever is focusing on fostering a culture that encourages experimentation and innovation, in conjunction with continuous learning and upskilling through targetted training programmes in areas like data analysis, digital thinking and problem-solving.
“From the outset, Unilever envisioned an operations metaverse where the machines do the work guided by the people,” adds Kevin O’Marah, Co-Founder and Chief Research Officer at Zero100. “Its journey has been just as much about the people as it has been about the technology. What the team has delivered is nothing short of remarkable.
“Our research team has noted an acceleration in the fusion of tech and operations over the last two years and Unilever is one of the first and few to go all-in on operations metaverse. Its autonomous operations are a shining example of what's possible when companies and their teams embrace digital transformation holistically. This report offers a blueprint for any organisation seeking to build a more efficient, customer-centric and future-proof supply chain.”
To read the full article in the magazine, click HERE.
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