Inner Cover Page

Student Name: Mustafa Nayer Mossalli

Employer Name: Unilever

Program Title: Customer Service Role at Unilever

Business supervisor Name: Mohammad Salih / Rayan Hammoudah

Academic Advisor Name: Dr. Mahmood Ali

Academic Department Chairman Name: Dr. Mohammad Fadulrabbi

Academic Department Chairman Signature:

Vice Dean for Academic Affairs Name:

Vice Dean for Academic Affairs Signature:

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 Outer Cover Page

College of Business Administration

Cooperative Education Student Report

The Role of Customer Service at Unilever

Submitted to

Dr. Mahmood Ali

Department of Supply Chain Management

By

Mustafa Mossalli

With Cooperation of Unilever

Jeddah, Saudi Arabia

In Partial Fulfillment of the Requirements

Of a Bachelor Degree in Business Administration

Submission date: 23rd November 2016

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 Abstract

Manufacturers are facing intensifying challenges from both local and international
competitors in the marketplace. In order to survive, manufacturers must be able to
manage the dynamic market variables, and satisfy their customers better than their
competitors. Recent examinations have started to look in a more detailed manner at
specific management techniques and practices to provide better recommendations on how
these manufacturers should respond to this challenge.

One of the possibilities that seek to leverage manufacturers’ ability to compete is to

develop high standard relationships starting with their customers and ending with their
vendors, which defines the term supply chain management (SCM).

This report aims to document the coop experience of a supply chain management
major student at the University of Business and Technology, College of Business and
administration who was trained in the customer service department under the supply
chain of the multi-national fast moving consumer goods company Unilever, Jeddah,
Saudi Arabia, under the supervision of Dr. Mahmood Ali.

In this report the researcher has presented the profile of Unilever, the final project
that was assigned by the employer, and all the routine tasks and activities that were
performed on a daily basis by the researcher.

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 Acknowledgment

I would like to take this opportunity to express my gratitude to Allah the almighty
and everyone else who supported me through this journey.

First of all, I thank Allah the gracious for granting me the opportunity to be trained
at the company that I wished to be trained at and for granting me the ability to undertake
and complete this training successfully.

Second, I would like to thank my family and friends, especially my mother and
father who have supported me throughout my training.

I also thank my academic supervisor Dr. Mahmood Ali, Assistant Professor,

Department of supply chain management for his constant guidance and encouragement.

Last but not least, I thank my fellow coops, colleagues, and business supervisors at
Unilever, who supported me, taught me, and made me feel at home.

I hope that this report will be useful for anyone that is interested in learning about
the company, specifically, the customer service department and the importance of its role
to the company’s supply chain.

Many thanks,

Mustafa Nayer Mossalli

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 Table of Contents
Table of Contents ............................................................................................................................ 5
Abbreviations .................................................................................................................................. 6
Chapter 1: Introduction ................................................................................................................... 7
1. Background .......................................................................................................................... 7
1.1. Project Problem .................................................................................................................... 8
1.2. Project Aim and Objectives .................................................................................................. 8
1.3. Conclusion ............................................................................................................................ 9
Chapter 2: Company Background .................................................................................................. 10
2. Introduction ........................................................................................................................... 10
2.1. History ................................................................................................................................ 10
2.2. Product Portfolio ................................................................................................................ 11
2.3. Customer Service ................................................................................................................ 11
Chapter 3: Methodology ............................................................................................................... 14
3. Introduction ........................................................................................................................... 14
3.1. Data Collection ................................................................................................................... 14
3.2. Types of Data ...................................................................................................................... 15
3.2.1. Primary Data .................................................................................................................... 15
3.2.1.1. Types of Primary Data .................................................................................................. 15
3.2.2. Secondary Data................................................................................................................ 16
3.3. Conclusion .......................................................................................................................... 16
Chapter 4: Data Analysis and Findings .......................................................................................... 17
4. Introduction ........................................................................................................................... 17
4.1. Data Analysis ...................................................................................................................... 17
4.2. Data Findings ...................................................................................................................... 18
4.3. Conclusion .......................................................................................................................... 20
Chapter 5: Conclusions and Recommendations............................................................................ 21
5. Conclusion ............................................................................................................................. 21
5.1. Recommendations.............................................................................................................. 22
5.2. References .......................................................................................................................... 22

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 Abbreviations

(OSA) On-Shelf Availability

(BCO) Bin-Zagr Company

(CCFOT) Customer Case Fill On-Time

(FMCG) Fast-Moving Consumer Goods

(BUL) Bin-Zagr Unilver

(RDC) Regional Distribution Center

(LJA) Lipton Jebel Ali

(SCM) Supply Chain Management

(KPI) Key Performance Indicator

(GSV) Gross Sales Value

(SKU) Stock-Keeping Unit

(UHJ) Unilever House Jeddah

(CS) Customer Service

(CSO) Customer Service Operations

(CSE) Customer Service Excellence

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 Chapter 1: Introduction

1. Background

Supply chain management (SCM) is one of the core functions in a fast-moving

consumer goods (FMCG) company, and is an essential element in operational efficiency.
A supply chain is a system of organizations, people, information, resources, and activities
that are involved in moving a product or service from the supplier to the customer.
Supply chain activities start from sourcing the required materials for manufacturing to the
transformation of those materials and resources into finished goods, and finally conclude
with the distribution of the finished goods to the customer. These previous examples of
supply chain activities are just a few examples among others different tasks.

According to the council of supply chain management professionals (CSCMP)

supply chain management is defined as the following: SCM covers the planning and
management of all activities concerned with sourcing and procurement, transformation,
and all logistics management activities. Importantly, it also encompasses coordination
and collaboration with channel partners that can be suppliers, third-party service
providers, intermediaries, and customers. In summary, SCM integrates supply and
demand management within and across organizations. SCM is an integrating function
with the primary responsibility to link major business functions and business processes
within and across organizations into a coherent and high performing business model. It
includes all the logistics activities, manufacturing operations, and it drives the
coordination of activities and processes with and across different business functions such
as: product design, sales, marketing, finance, and information technology.

An FMCG is a company that manufactures and sells products that are sold quickly
and at a relatively low cost. Examples of such products include processed foods, over the
counter drugs, toiletries, and soft drinks which are all considered to non-durable goods.

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1.1. Project Problem

The project assigned during the coop is related to the key performance indicator
(KPI) of the customer service (CS) department, which was causing great losses to the
company and the CS department. Customer Case Fill on Time (CCFOT) is the main KPI
for the CS department and is used by the company to measure the service level it is
providing to its customers. CCFOT is shown as a percentage, and is a percentage of the
amount of cases accepted by the customer on time out of the total number of cases
accepted by the customer. CCFOT is affected whenever the quantity of cases delivered to
the customer does not match the quantity of cases ordered by the customer. It is also
affected by not delivering the order to the customer on time.

Following is the formula for measuring the CCFOT rate:

CCFOT= (Cases Accepted by Customer on Time÷Final Customer Expected Quantity)

×100

An example of applying the CCFOT formula is as follows:

If a customer order is 1000 cases and only 700 cases were accepted on time by the
customer, then the CCFOT rate will be: (700÷1000)× 100= 70%

1.2. Project Aim and Objectives

The aim of this project is to support and improve the CCFOT rate in order to
reduce its losses, which will result in a better CCFOT rate, better service levels, and
higher sales for the company.

The primary objectives are the following:

 To perform an analysis on all the company’s Stock Keeping Units (SKU) to find
out which SKU’s had the most issues and were causing the larger portion of
losses on CCFOT.

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  To identify the reasons for high number of losses in the selected SKUs by
involving concerned departments.
 To evaluate the causes of losses and present specific action plans to reduce or
eliminate these losses.

1.3. Conclusion

In conclusion, this chapter presented to the reader an introduction to the supply

chain management function and its role in an organization. It also presented the project
problem, the aim, and main objectives of the project.

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 Chapter 2: Company Background

2. Introduction

Unilever is an Anglo-Dutch multinational FMCG company co-headquartered in

London, United Kingdom and Rotterdam, Netherlands. Its portfolio of products includes
cleaning agents, personal care products, food, and beverages. After Procter & Gamble
and Nestle, it is the world’s third largest FMCG Corporation according to a 2012 revenue
measurement. Unilever is the world’s largest producer of food spreads such as margarine.
Its products are sold in 190 countries across the globe.

2.1. History

Unilever was founded in 1930 by the merger of the Dutch margarine producer
Margarine Unie and the British soap maker Lever brothers. Hence the name Unilever,
which is a combination of the family names of both founders. During the second half of
the 20th century the company increasingly diversified its business from being a maker of
products made of oils and fats, and expanded its operations globally. It has made several
corporate acquisitions such as Lipton in 1971, Best Foods and Ben & Jerry’s in 2000, and
most recently Dollar Shave Club in 2016. These are just a few of the acquisitions
throughout the company’s lifetime. Unilever divested its specialty chemicals businesses
to Imperial Chemical Industries in 1997. In 2015, under leadership of current CEO Paul
Polman, the company gradually shifted its focus toward health and beauty brands and
away from food brands which were showing slow growth.

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2.2. Product Portfolio

Unilever owns more than 400 brands, but it focuses mainly on 14 of its brands
which have sales values of over 1 billion euros. These brands are: Axe/Lynx, Omo, Dove,
Flora/Becel, Heartbrand ice creams, Knorr, Lux, Lipton, Rexona, Rama, Magnum, Surf,
and Sunsilk. It is a dual listed company consisting of Unilever N.V based in Rotterdam,
and Unilever Plc, based in London. Both companies operate as a single entity, with a
common board of directors. Unilever is organized into four main divisions- Home Care,
Foods, Personal Care, and Refreshments (beverages and ice cream). It has two research
facilities in the United Kingdom, and one in each of the following countries: The
Netherlands, India, China, and the United States.

2.3. Customer Service

Customer service is the newest sub-department under the supply chain umbrella. It
was created for the main purpose of linking the company with its customers in a more
organized way by making the customer service department the only point of contact with
the customers rather than having several points of contacts which was the case prior to
the creation of the customer service department. Having several points of contact at the
company communicating with the customers often caused conflicts and
miscommunications because each department has its own objectives and ways of looking
and dealing with things. The goal of the customer service department is to ensure that the
company develops and maintains healthy, efficient, and effective relationships with its
customers and partners by serving them in the best possible way while also being
attentive to the company’s best interests.

The customer service department at Unilever is divided into two parts; customer
service operations (CSO), and customer service excellence (CSE). CSO manage and
oversee the commodities from any of the company’s three sourcing units (BUL-RDC-
LJA) to the distributor Bin Zagr (BCO). They work closely with the distributor and

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 almost meet on a weekly basis in order to discuss order plans, forecasts, or new
projects. The main goal for CSO is to ensure that the distributor always has sufficient
stocks of Unilever products to unfailingly fulfill customer (retailer) orders whenever an
order is placed by the customer. While customer service is keen to always keep stocks at
the distributor’s warehouse, they also strive to ensure that they do so without
overstocking the warehouse. This is achieved by modifying and controlling the order
quantities received from the distributor. Having excess amount of stocks at the warehouse
for long periods may cause the products to become obsolete and therefore cause losses to
the company.

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 Customer Service Operations

Factory Distributor Customer

(Ex.BUL) (BCO) (Ex. Panda)

Customer Service Excellence

Figure 1: Customer Service Sub-Departments

CSE on the other hand deals more with the downstream end of the company’s
supply chain. CSE manage and oversee commodities from the distributor to the
customers. CSO’s main goal is to ensure that customer orders are consistently fulfilled by
the distributor. Most of the customers are influential retailers such as Panda, Alraya,
Danube, who developing and maintaining a good relationship with is extremely crucial
for the success of the business. Ultimately, Unilever is depending on these retailers to
maintain the flow of their products. Some retailers even have enough leverage to dictate
their own terms and prices. CSO also works closely with the distributor but usually to
discuss matters more related to the customer. CSE’s main goals are: to ensure that the
customer order is delivered in full quantity and at the right time and, to ensure the
availability of the company’s products on the shelves of the customer’s stores. CCFOT
and On-Shelf Availability (OSA) measure these goals.

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 Chapter 3: Methodology

3. Introduction

This chapter will give the reader a clear idea about the sources of the data collected
for this report, and how it was collected. It will also ensure that the reader gets an
accurate and deep understanding of how the project was accomplished.

3.1. Data Collection

In the world of research, there are two common methods to collecting and reporting
information: quantitative and qualitative methods. The quantitative method tends to
approximate phenomena from a larger number of individuals using survey approaches.
The qualitative method to research is focused on understanding a phenomenon from a
closer perspective. (Ben-Eliyahu, n.d.)

Quantitative Method

The quantitative method to collecting information focuses on describing a

phenomenon across a larger number of participants thereby providing the possibility of
summarizing characteristics across groups or relationships. This method surveys a large
number of individuals and applies statistical methods to recognize overall patterns in the
relations of processes.

Qualitative Method

The qualitative method to collecting information focuses on describing a

phenomenon in a deep thorough manner. This is generally used in interviews, open-ended
questions, or focus groups. Usually, a small number of participants take part in this
researching method due to the large amount of resources and time required to carry out
such a project. Interviews can be highly structured and guided by open-ended questions,
or be less structured and take the form of a conversational interview.

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3.2. Types of Data

There are many methods of classifying data; two of the most common types of data
are primary data and secondary data. Primary data are data that are collected for the
particular research itself, using procedures that fit the research purpose best. At any point
that primary data are collected, new data are added to existing store of social knowledge.
To an increasing extent, this data created by other researchers is made accessible for
reuse by the general research community; this information is thereby called secondary
data. (Joop J. Hox, 2005)

3.2.1. Primary Data

Most of the data that were used in this report are primary data, which formed the
foundation of this report.

3.2.1.1. Types of Primary Data

1- Raw Company Data

Historical data from existing company files and records such as (total company
SKU’s file) and (Why file) are some of the files that were used to collect information
from for this report. The ‘Why file’ is the main and most important file in the CS
department due to the large amount of data it contains. Information such as the actual
amount of SKU’s ordered by the company, the average forecast bias, and the actual
quantities the factory is able to produce and much more is available in this file. This file
is updated weekly or semi-weekly by the CS department.

2-Informal Interviews/ Meetings

Informal interviews/meetings were conducted with a total of five demand planners

who were responsible for seven different product categories. The meetings/interviews
with the demand planning team had to be conducted to inform them about the project and

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the aim of executing the project in order for them to support and provide me with the
necessary data to complete the project. The support and data received from the demand
planning team was vital for completing the project. They were also conducted to have a
more clear understanding of the loss reasons that were provided by the demand planners
in order to assign effective action plans for each loss type.

3.2.2. Secondary Data

Secondary data sources used in this report was restricted to the information
available in the World Wide Web. Nowadays, the internet plays an extraordinary role in
the research field due to the infinite amount of data that it contains. It holds information
from an endless number of sources and references and consolidates it in one place. The
data in the internet can be accessed in just a few seconds, unlike textbooks, journals, and
newspaper articles which may be restricted to a particular subject, time-frame, or author.
In addition, it takes less time to search for a specific piece of information in the internet
than it takes if it were searched from a book.

3.3. Conclusion

This chapter presented to the reader two common methods to collecting

information. It also presented the two most common types of data classifications in the
research world, and the different sources of these data types that were used to collect the
information presented in this report.

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 Chapter 4: Data Analysis and Findings

4. Introduction

This chapter presents to the reader the major findings from the data analysis
performed for the project, and also how the researcher performed the data analysis step
by step. The chapter also contains a graph showing the findings from the analysis
performed.

4.1. Data Analysis

Following are the complete steps that were taken by the researcher in order to
analyze the data and obtain the major findings for this project.

Step 1:

An analysis was performed on all of the company’s SKU’s to identify which SKU’s most
of the CCFOT losses are coming from. This was accomplished by searching for the
SKU’s with the lowest or highest percentages of Average Forecast Bias. The average
forecast bias percentage shows the difference rate between the actual forecast conducted
by the company’s demand planners and the sales history of the company. The company’s
norm in terms of the average forecast bias percentage is between -5% and 5%. Despite
that, my business supervisor instructed me to filter the SKU’s that had a percentage
higher than 20% and lower than -20% (changing the norm to between -20% and 20%) to
focus more on the SKU’s that are causing higher losses or may have larger issues.

Step 2:

After removal of all SKU’s that had an average forecast bias percentage less than 20% or
more than -20% further removals of SKU’s was done by applying the 80/20 rule. The
80/20 rule was applied to select the 20% of SKU’s that contributed to 80% of the losses.
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Step 3:

Sorting out these SKU’s (based on their categories), sharing the lists of SKU’s with the
demand planners and requesting them to thoroughly check each SKU to identify their
loss reasons and provide it to the CS team. Due to the preoccupation of the demand
planners with their own responsibilities and activities they had to be followed-up with on
a daily basis in order to get the loss reasons.

Step 4:

After receiving the loss reasons for all the SKU’s of all the different categories from the
demand planners, consolidation of all the SKU’s and their loss reasons into one file is
done along with initial categorization of loss reasons.

Step 5:

The next step was reviewing all the loss reasons alongside my business supervisor to
conduct further categorization to the loss reasons in order to reduce the number of loss
type names, and thus making them more generalized and more presentable to senior
management.

Step 6:

A brainstorming session was conducted to produce and assign specific action plans for
each loss type in order to reduce or eliminate all the losses.

Step 7:

The final step of the project is to closely monitor the progress to ensure that the action
plans are executed properly. Monitoring is done by constantly comparing between the
forecast accuracy of future forecasts with previous ones.

4.2. Data Findings

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 After several weeks of conducting in-depth analysis on the company’s SKU’s, a
great amount of valuable data was obtained. The information obtained from the analysis
conducted and working on the project is as follows:

CCFOT losses have impacted customer service and the company negatively to a
large extent. Total amount of CCFOT losses has reached $ 8.5 million. The highest loss
was caused by demand issues, which amounted to $4 million. Demand issues are usually
a result of forecast inaccuracies due to constant change in customer/market demand. The
second highest loss type was market issues which amounted to $2.1 million. An example
of a market issue is a price disagreement in a transaction between both parties. The third
loss type was promotion-related issues, which amounted to $1.7 million. Not having
sufficient stocks of promo SKU’s to fulfill a customer’s order is an example of a promo
issue. The fourth loss type is delisted SKU’s. A delisted SKU is an SKU that the
company decides to stop producing, and is no more an active SKU. An SKU that does not
perform well in the market gets delisted. This loss type has resulted in total losses worth
$382K.The fifth and final loss type is order management issues, which amounted to
losses worth $ 216K. An example of an order management issue is when the distributor
does not place an order to Unilever while the customer has placed an order to the
distributor.

The top three categories that have the highest amount of demand issues are, in sequential
order: 1-skin care 2-skin cleansing 3-hair care.

The top three categories with the highest amount of market issues are: 1- tea 2- laundry 3-
deodorants.

The top three categories with promo issues are: 1- skin care 2- skin cleansing 3- hair care.

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4500000 $ 4,079,504.20
4000000
3500000
3000000 $2,150,775.15
2500000 $1,737,046.92
2000000
1500000
1000000 $ 382,929.98
500000 $ 216,256.52
0

Figure 2: Bar chart showing the total contribution of each loss type.

4.3. Conclusion

The plan for this project was to dig deep and analyze the situation of every single
SKU thoroughly, to know how every SKU is performing, and the accuracy of previous
forecasts done for every SKU to ultimately know where most of the CCFOT losses are
coming from as well as the types of these losses. This kind of in-depth analysis provides
the CS and the DP departments with valuable insight about the situation of every
individual SKU, and may also detect particular market trends, which if detected at an
early stage, could prove to be useful for the company in order to make changes or
adjustments to avoid potential losses. Also, identifying the loss reasons of each SKU
allows the CS and DP departments to allocate specific action plans for every SKU.

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 Chapter 5: Conclusions and Recommendations

5. Conclusion

This is the first time that such a project was ever done at Unilever, and the fact that
I was trusted completely to carry out such a project provided a huge boost to my
confidence in my own abilities. I am utterly proud to have been a part of this project and
to have worked alongside a great team. Sadly I will not be able to witness the outcome of
the project as my coop here ends before the results become noticeable as it may take time
for changes to take effect. However, the results will be monitored closely in the next few
months by the CS team to ensure that the changes/action plans are being implemented by
the DP department and that losses will be reduced.

The findings from the analysis that was conducted for the project will be extremely
useful for the company to identify their opportunities and threats, as well as their
strengths and weaknesses. The findings from the analysis which were presented in the
previous chapter reveal the issues/ loss types that were affecting the company, and the
impact each loss type had on the company and on CCFOT. This gives the company
insight on which issues and SKU’s it should focus on the most in order to reduce or
eliminate the highest losses, and not focus on issues that have a minor impact. It also
reveals to the company the sources of these issues/losses, meaning which SKU’s are
contributing the most for each issue. This type of information allows the company to take
effective and efficient corrective and preventive actions that may have a profound impact
on its performance.

In conclusion, this report has recognized the role of supply chain and customer
service at Unilever, and what the tasks and responsibilities of the customer service
department are. This report has also presented in detail how a major project in the
customer service department at Unilever was carried out by the researcher, who is a
supply chain management student from the University of Business and Technology. In
addition, this report has presented an overview of Unilever, which will familiarize the

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reader with the organization and the FMCG industry, and how it operates from a supply
chain and customer service perspective.

5.1. Recommendations

After conducting thorough research and closely looking into the situation, the
researcher has come up with a couple of recommendations that may improve the process
of controlling the problems that are affecting the company. The recommendations are the
following:

1- The researcher advises that the demand planning team of each category to give
more attention to the performance of each SKU that they are responsible for. This
is done by closely assessing the situation of every SKU on a regular basis in order
to detect any signs of potential issues at an early stage to limit the losses.

2- Also, the researcher advises that the demand planning department’s performance
to be linked to with the CCFOT so that it gets affected by the rate of the CCFOT.
This additional responsibility for the demand planning team will ensure that they
will be dedicated, and more attentive to ensure that exceptional service levels are
being performed in order to not get affected by a low CCFOT rate.

5.2. References

Ben-Eliyahu, A., n.d. Understanding different types of research: What's the difference between
qualitative and quantitative approaches?.

Joop J. Hox, H.R.B., 2005. Data Collection, Primary vs. Secondary.

Khaled Al-Falah, M.Z.A.A., 2003. The Role of Supply Chain Management in World-Class
Manufacturing.

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