10.4 Case Study of Best Practice in Customer Service: Unilever Customer Service Team Unilever, Durban, South Africa Unilever South Africa: Winning in the marketplace through customer service Following a period of change and reorganization, Unilever South Africa (ULSA) entered a phase of unpredictability and pessimism, faced with challenges in their customer service delivery. The three previously separate Foods, Home & Personal Care and Ice Cream businesses were merged into One Unilever. The business was characterised by system integration challenges, high levels of employee turnover, skill and process erosion and loss of morale. The resultant approach to customer service became fire fightingaddressing symptoms of the customer service issues and not root causes. The problem boiled down to availability of products on shelf. If the products were not available on shelf when the shopper went to the store, no amount of marketing could make up for it. Customer service KPI Customer service in Unilever is measured using Customer Case Fill On Time (CCFOT): this measurement includes all service and efficiency losses from the point of original order that the customer places to the final receipt of the product by the customer. It is more rigorous than traditional Case Fill in that it includes measurement of efficiency loss and external losses (outside of Unilever's control). ULSA's customer service as measured in CCFOT aver- aged 61% (with lowest point at 48%). This meant that out of 100 cases of product ordered, the customer would receive only 61 cases at the right time when the customer needed it. Taking ownership In order to improve their customer service, ULSA started with a deep understanding of the root cause behind poor service delivery. Customer service losses were analysed by a cross-functional team. The output indicated improvements required across people, systems and organisation. This supported the South African Board's drive for a more holistic and business wide approach to customer service. The resultant improvement programme therefore not only addressed the traditional areas like sourcing unit capacities, but also included system and business process improvements, people skills and capability, leadership and behavioural elements. The Board took owner- ship of the improvement programme, championing it through the business and driving strong KPI alignment behind CCFOT. CCFOT improvements were also written into the performance bonus targets across the business. (continued) 10.4 Case Study of Best Practice in Customer Service: Unilever 185

Behavioural enablers The behavioural enablers that were fundamental to the improvement programme were customer service mindset and new ways of working. It was evident that everybody within the company needed to own customer service, not only the supply chain function. To make service culture second nature both with internal and external customers, the service mindset training was driven across all functions throughout the business. The team also encouraged the building of a culture of root causes analysis, as opposed to fire fighting, and continuous improvement throughout the organisation, not just in the manufacturing environment. In the development and delivery of the improvement programme, the South African team drew heavily on the expertise, best practice and support of the regional Customer Service Excellence team. Positive results Keeping in mind the service profit chain model, every 3% of service improvement would equal 1% of growth for business. The overall aim of the customer service improvement programme was to lift customer service from the level of 61% to above 90% whilst reducing inventory as measured in days on hand to < 60. The successes of this major customer service improvement programme were already apparentabout 1 year into the projectwith an increased service level to about 85% in CCFOT and a 33% decrease in inventory, exiting below 60 days and releasing R650m cash for growth. This was delivered in parallel with a massive SC transformation project of combining and optimising the previously separate Foods and Home & Personal Care ambient distribution networks into one. Outlook Whilst the results so far have been impressive, much more needs to be done to ensure that ULSA's improved customer service will be maintained. The team is now focusing on embedding the gained improvements into the organisation. Unilever South Africa aims to: Ensure that improvements are maintained in the face of market volatility and business complexities. Ensure the new ways of working and customer mind set become a way of life Remain aligned to their customers, both internally and externally. Through these three steps, the team is determined to continue its journey of winning in the marketplace through customer service.

1. Summarize the case study.

2. Explain how customer service is measured.

3. Discuss the steps Unilever took to improve customer service.

4. Discuss the results and the outlook.

5. Provide two additional suggestions to improve Unilever's customer service.