Why Unilever and Amazon Partner on Kaizen-Optimized Supply Chain Transformation
Unilever’s partnership with Amazon has required the company to take a distinctive approach to supply chain planning in order to streamline operations and optimize efforts.
The company notes that because Amazon’s range of stock and quantities is so vast, with a significant emphasis put on expedited delivery, the supply chain model is completely digital and necessitates a differentiated strategy. As a result, the companies turned to the Kaizen Japanese problem-solving methodology.
Kaizen emphasizes moving away from conventional assumptions, and so Unilever and Amazon began analyzing the end-to-end supply chain system from a new perspective. They mapped pain points, using data to reduce waste and inefficiencies in the order-to-fulfillment cycle. Additionally, the process focused on collaboration and streamlining operations. Thus far, it has brought together 150 supply chain and business leaders from Unilever and Amazon across six global regions.
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The company has carried out Kaizen workshops with Amazon in the United States, Australia, Brazil, Europe, Egypt, and India, according to a blog post by Mark Sumner, Unilever’s global digital commerce customer supply chain director.
"Through a series of very open, productive conversations and actions, we have improved 15 key performance indicators and solved over 100 pain points,” he noted.
These are not the only companies using the Kaizen methodology to optimize supply chain efforts. Heineken, for example, used it to develop its Smart Brewery Program, which includes IOT reporting, analytics, and robotics.
“All the information, access to colleagues, and collaboration tools that are needed for the operator is in the palm of their hands,” said Wiggert Deelen, The Heineken Company's senior director of global supply chain transformation, in a previous webinar hosted by CGT.
The Benefits of Kaizen
Unilever and Amazon have been partnering to host Kaizen workshops since 2022. In Australia, Unilever saw a 40% reduction in its out-of-stock rate on Amazon in 2022. In Egypt, it drove an incremental 20% improvement in Unilever’s order acceptance rate.
Last year, the workshops in India drove a 35% increase in Unilever’s fill rate and reduced defects when delivering Unilever products to Amazon fulfillment centers by 55%.
As part of this, Unilever created an internal dashboard to share supply chain performance data across its global teams. Overall benefits include lower supply chain costs, improved demand planning, expedited delivery, a consumer-centric portfolio of brands, and elevated in-stock rates, Unilever reported.
“Smaller shifts have made a big impact too, such as changing the shipping packaging on some products, so that Amazon doesn’t need to re-pack them before sending to shoppers. They just use our box and add an address label,” said Sumner. “It all adds up to a stronger, future-fit supply chain.”
