Controlling System Within Unilever Commerce Essay

understandling System Within Unilever Commerce EssayUnilever has an immovable control experience, which is agreed and frequently reviewed by the Boards. This incorporates stake bring offment, home(a) control procedures and trading operations control which are planned to provide rational, but not complete, security that assets are refreshed, the risks facing the business are being addressed and all information required to be released is reported to the Groups senior management, including where appropriate the Group Chief Executive and Chief Financial Officer, deep down the required timeframe.RISK MANAGEMENTUnilever manages a variety of marketplace risks, including the effects of fluctuations in foreign exchange rates, interest rates, and liquidity. It deals with the following risksTreasury RisksCommodity Risks outgrowth RisksCustomer Relationship RisksSystems and information RisksExternal RisksTREASURY RISKSUnilever has an interest rate management policy designed at enhancing net interest cost and change magnitude instability. This is accomplished by adjusting the interest rate analysis of debt and cash places over the practice of interest rate switches.Fixed rate investments and borrowings give growth to a rational note value interest rate risk. The fluctuating amounts give growth to a cash flow interest rates.Because of Unilevers wide operational reach, it is subject to risks from changes in foreign currency values that could move incomes. It is not possible to fully border these fluctuations. Unilever does control a foreign exchange policy that needs operating(a) companies to manage tradeoff and economic foreign exchange contacts within given limits. This is attained mostly finished the use of forward foreign exchange contracts. regional groups superintend compliance with this policy.Unilever objects to decrease its foreign exchange contact in operating companies by borrowing in the local currency, except where introverted by local guidelines, sh ortage of local liquidity or local market conditions. In order to decrease the risk, Unilever border such investments and from time to time they reassess the currency.COMMODITY RISKSUnilever sees risk where there is the potential for price instability in respect to the distinct commodities utilise in the production of the ultimate product. Commodity is the verge use to describe a type of good which, while in demand, has no diametric variances when related to a rivals offering. Unilever feels that compelling a goods-based supply-chain perception helps to manage contact. In accumulation to the commodity risk focus, Unilever besides borders risk by locking down contracts and using results.PROCEDURE RISKSProcedure risk involves that theres a leave out of formal procedures and lack of quality control system. Unilever always disability their procedures and policies and they do accommodate a check and balance over their control system.CUSTOMER race RISKSTo know the needs and taste of customer and building strong relationship is also a risk factor for Unilever because of the continuous innovations and developments the needs and taste of the customers are changing frequently. In order to know the needs of customer Unilever has set its customers sales and design outlets which enables them to find the new ways to satisfy customer needs. They monitor the progress on a prescribed basis.SYSTEMS AND INFORMATION RISKSUnilever use IT systems to interact with their customers but on the other hand they have a threat of the utilise of their personal and sensitive information through unauthorized access. In order to prevent this risk they maintain the control system check the security settings on a regular basis.EXTERNAL RISKSThe external factors such as economic and political indicators and natural disasters can create a great amount of risk for Unilever. They regularly update themselves from the current business results and cash flows. They have been continuously desi gning plans for crisis management in the event of economic, political and natural disasters.INTERNAL apply AND PROCEDURESUnilever control framework is supported through a code of Business Principles which set values of efficiency. It needs that senior managers in each section controls the value of internal control because they are a key to huge risk factors. The Boards have individually all the responsibility for establishing procedure to check the effectiveness of internal control and reviewing and revaluating them their effectiveness. There is a day- to- day review of effectiveness of internal control system and Unilever monitor its risks with ongoing basis.OPERATIONS CONTROLSOperations Controls is the control in which you make sure that operations activities are carried out as they were planned. Operations Controls include following controlsFinancial ControlBudget ControlInventory ControlMaintenance ControlCost ControlFINANCIAL CONTROLManagers at Unilever put financial controls in order to trace motion and mensurate the performance to the attainment of financial goals. Unilever managers develop strategies to line the risk in a structured way. They follow a financial assessment exercise through which they evaluate that at what pace they are reaching their strategic financial goals. This assessment process requires the senior manager in each business unit to check effectiveness of financial controls.BUDGET CONTROLManagers at Unilever put budget control in order to track that whether their income and expenditures are planned or not. They have a comprehensive budget system which is approved by all the stakeholders and board of directors, which is revised and restructured on a regular basis. The performances against the budget of Unilever are monitored through monthly and quarterly reporting routines. Then the updated report is distributed among the stakeholders.INVENTORY CONTROLUnilever has a very seemly system through which they control their inventory.T hey produce the goods fit in to the demands and tastes of their customers. A unique supply chain and warehouse capacity is bigger challenge for them. They had a very strong inventory control at their different distribution centers, where they control the supply and demand of their products. Unilever has also a proper warehouse management system in which they capacitated their inventories.MAINTENANCE CONTROLUnilever has a proper maintenance control system. The maintenance manager at Unilever individually monitors the equipment on daily basis. After observe, they create a report on the history of this monitoring for future examination. Furthermore, they have a warning system alerts on their equipments which makes their controlling system more effective and efficient.COST CONTROLCOST control is the process of controlling cost and checking whether the costs are with the accordance to the budgeted cost. In Unilever cost control is an essential part because it determines business stabil ity. Unilever controls cost to create more profit. They have a proper check and balance over the wastages of raw materials so that they might eliminate those raw materials which are inadequate for their production process.INSPECTIONUnilever has also an inspection system in which they hire inspectors. They check quality of products, machines and equipments, raw materials used for the production of goods, site inspection and location inspection where they conduct their look into work.AUDIT AT UNILEVERUnilevers internal audit plays an important role in the assurance of the value of risk management and other related control operations to both operations management and the Board. Unilever has an independent audit committee which is entirely composed of Non-Executive Directors. This Committee take overs Chief Auditor and external auditors on a regular basis.INFORMATION TECHNOLOGYUnilever uses Information technology to provide managers with information which they need in their decision m aking. Unilever uses SAP software to monitor and control its business, which now used globally. The ERP system produces annual sustainability reports. SAP is working more with the business leadership and process leaders it develops and support business strategy. The SAP system values it customers, meet its customers, started to listen its customer and take corrective actions for the needs of its customers.Mistakes can be controlled by SAP and they are rectified at the time they are find by SAP.SAPSAP stands for Systems Application and Products in Data Processing. It was developed by IBM engineers in 1970s as standard based software. SAP is used by organizations to manage their enterprise. This includes managing their day-to-day operations, inbound and outbound logistics, finances, HR etc.ERPERP stands for Enterprise Resource Planning. It is implemented by various organizations to centralize the database systems and functions of every department in a single system. ERP is used by Un ilever which helps them to decrease their losses and increase their profit.