Unichema was a subsidiary of Unilever. It produced over half a million tons of oleochemicals yearly for customers worldwide. The oleochemical products produced by Unichema had a large application area-in polymers, cosmetics, rubber, textiles, leather, paper and lubricants. Customer demands and market pressures were forcing Unichema to become more competitive and more responsive to customer requirement such as lower prices, shorter lead times on deliveries, precise timing for deliveries better quality, and increased reliability over time. Moreover, the concept of just-in-time was being adopted by more and more manufacturers to enhance efficiencies in their manufacturing environments. All of these forces led Unichema to a fundamental improvement. Having determined that achieving efficiencies depended on the plant becoming more customer driven and less production driven, Unichema tried to support changes that drove a customer orientation within the company. The biggest change affected the areas of production, logistics, sales, and customer service. In the new system, the logistics department assumed a coordinating role between the customer and production. Logistics assumed the role of providing customer service on a day-to-day basis, interacting directly with customers to determine their specific needs and the exact timing of these needs In addition, Unichema applies the Activity Based Costing analysis to segment its customer in order to gain the benefit of efficient information about customer. By using this approach, Unichema can take market advantage by better understanding various customers and providing respective products and services of each segment. All things considered, Unichema wanted to utilize its equipment as efficiently as possible in order to not only ensure but maximixe the return on assets. One of the necessarily competencies that would make Unichema to achieve this desired goal is having strong partnerships along with its supply chain.
1. The increasing set of customer demands
In an increasingly competitive market environment, the requirements from the industry’s customers to their suppliers are getting tougher. Unichema, as a supplier of chemical products, is confronted with a set of increasing demands from its customers. In order to keep their competitive edge, suppliers are demanding lower prices for Unichema’s products, however, which should still have excellent quality. Moreover, many of them are striving for just-in-time deliveries, which mean that Unichema has to provide shorter lead times linked with precise delivery times for these goods. Small just-in-time deliveries vs. long production runs
For an industry, which is traditionally determined by long runs, high capacity utilization and backlogs of customer orders these sets of customer demands are indeed a challenge. In order to efficiently tackle these problems, a supplier needs at least two important abilities. First, the production must be flexible enough to cope with sudden changes in market demands. Production units should be organized in such a way, that changing product lines can be achieved within a minimum of time. This goal could be achieved by setting up modern plants, which are capable of being set-up quickly, and which are dedicated to specific products. Secondly, instant detailed and accurate information regarding customer’s needs is required. This can be achieved through intense communication with the customers. If information, such as current inventory levels of customers as well as forecasted sales of customers were known, the supplier could already react accordingly much in advance. 2. Segmenting the customer base and product mix
Segmenting customer: Unichema realized that it was necessary to become more customers driven in order to increase production volume and to provide new products and services to its customers. It should have a greater understanding of customers’ business needs, their product...
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