Business Ideas Regarding Sustainability Company - Research Paper Example

Sustainable Operations in Unilever Sustainable Operations in Unilever Introduction Companies, to establish strategies of supply chain, use sustainable operations. Sustainable operations is the eco-efficiency attained by the management of all kinds so as to align with the customer service level that comprises of delivery, design, client, procurement, distribution, raw materials, use, disposal, and aspects like costs, resources, environmental impacts and lead time reduction. In the dynamics of the common future, sustainability operations is a process that results to investments, institutional changes, resource exploitation, technological changes, hence harmonizing the potential of increasing the future and present to meet people’s needs. Unilever is one of the top consumer goods suppliers with products selling in over 200 countries. The company’s strong portfolio of care brands and foods is trusted by customers all over the world whereby 180 billion packs of their products are bought each year. Unilever makes world’s quality brands and has leadership positions in most categories that they compete. The company boasts of 14 brands which makes over 1 billion Euros per year. It also leads in categories like tea, dressings, spreads, skin care, savory, and deodorants. Unilever has made good progress in transforming itself into a sustainable growth. It has exceeded a forty billion euros turnover, with all categories and regions contributing to growth (Unilever, 2012). Even with volatile product markets and cost increases, its gross margin has risen by 0.2 percent hence reflecting a disciplined strategy implementation. The company has a sustainability living plan that focuses on environmental improvements and not just the company’s direct operations but its distributors, suppliers and how consumers make use of its brands. Unilever’s gets its raw materials from forests or farms with the company committing itself in helping people globally to improve their well being and health. It is also committed to slash the environmental footprint of its products while still doubling its business. Its ambition is to double its business while still reducing the environmental impact such as disposal, sourcing and consumer use. Unilever’s sustainability operations focus on improving hygiene, health and nutrition as well as sustainably sourcing its raw materials by the year 2020. The company pioneers the art of establishing a competitive advantage and winning many customers on brand authenticity through environmental well being and positive impacts on people. Like most companies have embraced sustainable practices, Unilever has been able to achieve financial results by risk and cost reductions. The company has created leadership practices by using sustainability commitment to align its brands with consumer’s quest for authenticity and this has enabled the company to achieve product market growth and increase in profits. For instance, The Company’s Lifebuoy soap has achieved double growth by its campaign on hand washing awareness, which links cleanliness and human health. The oral health campaign by the company’s “Brush Day and Night” that encourages both children and parents to adopt better brushing habits has grown the health care brand by 20 percent since 2008 (Bill, 2013). Unilever’s Sustainability Operations The company has cut over 1 million tons of CO2 emissions from its logistics and manufacturing operations since the year 2007. The activities in manufacturing have offered most savings cutting 825, 000 tons of CO2 while still improving logistics operations efficiency hence helping Unilever further shed 210,000 tons of emissions since the 2007 baseline. Its sustainable living plan has a central target of minimizing the reducing gas emissions from greenhouse by introducing an eco-efficiency raft program that sheds Unilever’s operating costs by $390 million since 2007. This was the period in which it has is sales grown by 27 percent from 55.5 billion to 68.6 million. Measures taken by the company includes installing a combination of power and heat systems which reduces CO2 from the company’s European operations by 55,000 tons while still cutting energy bills of $14 million, establishment of transport hubs hence reducing distance covered by Unilever’s trucks and establishment of biomass boilers. According to the company’s manufacturing sustainability director, handling emissions has its challenges but still it provides opportunities that result to magnificent savings. "Eco-efficiency isnt just about reducing the environmental footprint; it also makes good business sense”. The eco-efficiency programs, since the year 2008, have avoided over $412 million in costs; with almost $12 million in disposal of waste, $23 million in water, $242 million in raw materials and $135 million in energy. This is an indication that the benefits are good especially where energy prices are rising (BusinessGreen, 2013). Unilever has an aim of reducing environmental effects of its manufacturing operations by reducing both the waste created and resources used. The company is determined that by year 2020, the CO2 emissions will be below or at 2008 levels even with the high volumes. This shows a reduction of 41 percent tonnes in production. Additionally, it will double its use of renewable energy by 41 percent as a long term goal of renewable energy is effected. The company’s manufacturing sustainability strategy focuses mainly on four areas namely, making regional and global purchasing to be efficient, reducing impact of existing factories, reducing impact of environmental production facilities and embracing new technology. Unilever’s extensive retail network gives it an opportunity to create awareness of greener building facilities. Sustainability Living plan covers a significant focus area on construction including selection of site, finish material, water conservation, energy efficiency and indoor environment. These standards are applied by the company sustainability plan to incorporate finish options, which improves air quality indoors, increase in energy efficiency and use of recycled materials. As a way of supporting the company’s growth in business, Unilever requires new production lines and factories ensuring that the eco-efficiency is created into designs of its new facilities. Hereby, the company uses methods such as optimizing the fuel to use by choosing the fuel with lowest greenhouse gas emissions, economically available and viable, building fabrications such as sun shading screens and insulations. They also send minimum standards for new factory building certifications, installation of high efficiency machines, optimizing distribution of water, energy and waste as well as exploring opportunities in renewable energy like biomass fuel usage in furnaces and boilers. Such considerations ensure that the new facilities have sustainability created into core designs and significantly eco-efficient. The Engineering services at the company works in collaboration with other external suppliers on most initiatives. Moreover, the company uses certification systems like BREEAM and LEED assessment methods as well as rating systems (BBC, 2010). This way, building in sustainability enables the company to reduce cost impact of the initiatives and ensuring better financial returns hence the facilities continues to deliver long-term benefits on eco-efficiency. Using such a holistic method ensures that each of the company’s new facility is in a position to use less resources and still produce high volumes. Unilever uses a method of “design once and deploy everywhere” so as to leverage the international scale, design and speed up implementation, and reduce equipment purchase costs. Unilever has over 200 manufacturing sites that incorporate sustainability into the current manufacturing program thus focusing on continuous improvement as well as making investments. The company uses several ways to reduce the environmental impact and this range from processes like replacement of redundant or inefficient equipment, and replacing air compressors and boilers. In order to build the eco-efficiency program momentum the company has ring-fenced investment to run water, CO2 and energy reduction projects that can deliver magnificent financial and beneficial environmental benefits. Unilever has a well-developed improvement program for its factories through the Total Productive Maintenance (TPM) approach. The utilization of the company’s scale has enabled it to introduce a variety of contracts at regional, county and global level making it able to address requirements on large scale in an effective cost manner. For instance, switching to a renewable energy in the year 2011 in Europe has enabled the company to meet purchased requirements (electrical) of the 64 European sites (Unilever, 2012). This has made it possible for Unilever to reduce its CO2 by 255,000 tonnes approximately. A similar methodology was introduced in North America by the company; hence, attaining emission reduction of the same magnitude. Unilever has also introduced international purchasing agreements for factory equipment like boilers, which have enabled them to achieve a high environmental performance and lower costs. On waste disposal, the company has established waste contracts nationally resulting to magnificent benefits. It is making progress and all its manufacturing sites so far in all eighteen countries have attained a milestone of disposing zero non-toxic waste to landfill. This means that 75 tonnes of the waste each year are not disposed to landfill as it was in 2008. Many of Unilever’s employees have business ideas regarding sustainability and the company has set aside a budget that will see the ideas happen. Factory employees for instance are allowed to apply for investments through their ideas whereby they are evaluated in terms of financial return and environmental benefit. In 2012, more than 500 projects were recognized and the top 100 were implemented the following year. The combined benefits currently deliver about 1% of the company’s global water and energy use. The company aims to deliver awareness, tools and techniques as well as share quality practice with people who have the responsibility of reducing environmental impact on its manufacturing operations (Joel, 2013). Most progress has been attained through manufacturing practices at its factories, which the company continues to promote with the use of an environmental roadmap. In conclusion, as the company’s part of commitment in managing its operations in a sustainable manner and reducing gas emissions, Unilever is aware that its suppliers have a significant role to play to help achieve such goals. Therefore, it evaluates the opportunities of sourcing environmental preferred products like those with less toxicity, better recyclability, and high in durability, recyclable content as well as lifecycle of less waste, energy and water impacts. References BBC (2010). Unilever says sustainability key to new business. Retrieved from http://www.bbc.com/news/business-11755672.‎ BusinessGreen S. (2013). Eco-efficiency in manufacturing Sustainable living Unilever. Retrieved from http:// www.unilever.com Bill, R. (2013). How Sustainability is growing Unilever’s brand equity and profits. Retrieved from http://www.triplepundit.com/.../sustainability-growing-unilevers-brand-equity Joel, M. (2013). Unilevers sustainability program saves $395M since 2008. Retrieved from http://www.greenbiz.com/.../unilever-sustainability-program Unilever (2012). Operational highlights - At a glance. Retrieved from http://www.unilever.com. Read More