UNILEVER OPERATION AND LOGISTIC MANAGEMENT

Unilever Operation And Logistic Management

Unilever Operation And Logistic Management

Introduction

Unilever providers have become important players in global supply chain management as increasing numbers of firms are outsourcing their logistics activities. However, the role of the information technology (IT) capability of these Unilever providers has not drawn much research attention. The way in which Unilever providers develop IT capability and how IT capability affects their competitive advantage deserve further investigation. This study has developed and tested a research model to address these issues. By integrating the concept of technology orientation from the strategic orientation literature into the resource-based theory, we investigate both the antecedents and the consequences of IT capability among Unilever providers. The model was tested using survey data collected from 105 Unilever firms in U.S. The results show that technology orientation has a significant impact on resource commitment to IT and managerial involvement in developing IT capability of Unilever firms. It also indicates that IT capability significantly affects three important dimensions of the competitive advantage of these firms, namely, reducing costs, providing innovative and customized services, and improving service quality.

Discussion

More and more industrial firms see the real benefits with outsourcing their logistics operations to a third party. With the global economic downturn, retailers and suppliers change their business mode and force to cut their limited resources more stringently. Unilever Logistics parties spot the opportunity and provide more favorable rates, value added and good quality service. Through information technologies, Unilever Logistics help to reduce the total logistics costs, increase visibility and increase overall supply chain efficiency.

The literature suggests that the IT capability of Unilever firms is one of the most critical factors affecting the decision of a logistics user to outsource to a Unilever provider. For example, among Australian firms, the question of whether it is possible maintain an integrated information system (IS) with a Unilever firm is the main consideration in developing a Unilever outsourcing relationship (Sohal 2002:74-85), and indeed, concerns over the IT capability of Unilever providers are still salient even after an outsourcing relationship has been established. For example, studies from the United States (Sheffi 1990:12-26), Australia (Sohal 2002:10) and Singapore (Bhatnagar et al. 1999:46) find that logistics users expect to have frequent access to a Unilever provider's latest technological expertise and computerized systems. A survey of Unilever CEOs also revealed that Unilever firms must face the challenge of customizing their IT to meet the requirements of different logistics users (Lieb and Bentz 2005:98-112). To summarize, the IT capability of Unilever providers is critical to the development and maintenance of successful logistics outsourcing relationships (Sauvage 2003:16-54).

IT Capability

Despite the significant implications of IT capability for Unilever providers involved in outsourcing relationships and supply chain management (SCM), there is sparse and disjointed empirical evidence on the role of IT capability in the business performance of such firms (Sum et al. 2004:74). Most previous Unilever studies are exploratory and focus on logistics users, rather than Unilever providers (Maloni and Carter 2006; Selviaridis and ...