Unilever’s ice cream supply chain is leveraging artificial intelligence (AI) and digital tools to respond to changes in weather patterns, optimize its product and materials inventory, reduce waste in the supply chain, and identify growth opportunities in a highly seasonal business.
Unilever, a member of the Food Shippers of America (FSA), is a food manufacturer with a portfolio that ranges from indulgent ice creams to nutritionally balanced foods and everyday household care products. The company produces world-recognized brands that include Ben & Jerry’s, Magnum, Hellman’s, Lipton, and Knorr.
The food manufacturer’s ice cream supply chain spans 60 countries and 35 factory production lines, according to Cakir. In regions where ice cream sales are highly seasonable, consumer demand is significantly influenced by changes in weather conditions, she says. In a European summer month such as June, even a 1°C rise in temperature can substantially impact sales forecasts.
Given this variability, Unilever’s has used AI to create more agile supply chain systems to address such fluctuations.
“It’s our job to ensure Ice Cream’s end-to-end supply chain – from our factory production lines to our estimated 3 million ice cream freezer cabinets – is prepared to respond to fast-changing weather patterns,” says Cakir.
Supply chain teams are using AI and digital tools in new and innovative ways, such as to analyze data insights (including weather inputs) to provide more accurate volume forecasts. For example, in Sweden forecast accuracy has improved by 10%.
Having a more precise understanding of the expected sales for Unilever’s ice cream brands each month means production lines can be adjusted and costs reduced accordingly.
“Using AI we understand where to sell, how much we are going to sell, in which cabinet we are going to sell, and when and where to send our orders in the most efficient way,” says Cakir.
“Thanks to forecasting process improvement, our service has increased while costs have been optimized,” she continues. “All of which has contributed to our overall service level to consumers increasing to world-class levels. We’re in the top tier in most of our markets.”
Ice Cream’s production volumes depend on prebuilt forecasts developed at the beginning of the year, according to Cakir. Now AI can provide the supply chain team with probabilities for temperature ranges that more accurately predict demand in key markets. This ensures long-term plans and volumes are in place for any potential changes in weather conditions.
In the shorter term, if there is an unexpected heatwave in one of Unilever’s markets, the company’s inventory systems enable it to identify available stock locations and reallocate key products to meet any increase in demand.
Unilever also optimizes route plans to ensure its refrigerated fleet delivers products in ways that reduce energy use.
Alongside more accurate production volumes, AI also is helping Ice Cream’s factories run more efficient production lines.
Using a live AI system which focuses on optimum variables, production performance is improved and waste during production is minimized.
By streamlining processes, AI is saving Ice Cream up to 10% of some raw materials which is significant for high-value ingredients such as vanilla and cocoa.
The game-changer for forecasting, however, will be the roll-out of image capture and AI technology throughout Unilever’s freezer cabinets worldwide. Currently, 100,000 are AI-enabled and further roll-out is in progress.
“This will mean I don’t need to generate forecasts with different parameters because I’ll have stock insights in real time,” predicts Cakir.
In Turkey, the U.S. and Denmark, using insights from AI-enabled freezers has generated sales increase by 8%, 12% and 30% respectively.
In 2024, Unilever was recognized by Gartner as one of four Supply Chain Masters for its use of AI and digital tools to manage one of the largest producer-to-consumer cold chains in the world.
It’s an accolade supply chain teams at Unilever have won for an impressive six consecutive years.
“When I joined Unilever, I made forecast calculations using formulas I learned from college,” Cakir recalls. “Now, strategic use of AI and digital tools means my team can be freed up from repetitive tasks like number crunching. They can spend time developing agile strategies that will deliver growth for our business.,”
Digital transformation is shaping the future of Unilever’s ice cream business. By leveraging real-time data, optimizing logistics and providing the company’s employees with the right skill sets, Unilever is rapidly changing its supply chains to drive business growth.
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