Case Study #3: Decision Support, Artificial Intelligence, and B2C E-Commerce: the Case of Unilever By Dustin Allen MNGT 220-01 November 20, 2003 Question #1 Decision support systems, simply known as DSS, are often narrowly defined as highly flexible and interactive IT systems that are designed to support decision-making when the problem is non-structured (Haag, 2004). This definition expresses several keywords: support and non-structured. This means that although DSS greatly enhance the business processes, they do not do the business work itself.
The DSS will bring speed, information, and unmatched processing capabilities to “the table,” but the final overall decisions will have to be made by the knowledge workers involved, which will use the information provided by the DSS, along with his/her experience, intuition, and judgment. The other main keyword in the definition is non-structured. A non-structured decision is a decision that may have several “right” answers, but there is no logical path to find only one exact answer, unlike a structured decision (Haag, 2004).
Decision support systems are in action in nearly every meaningful, or more appropriately, successful, business organization for not only cost savings, but also for other attributes not involving price, which include better relations with suppliers and customers. Another aspect of technology that many organizations are now taking advantage of is the science of Artificial Intelligence (AI). Simply stated, AI is used to allow machines to imitate or duplicate, not only human thinking, but behavior as well.
Whether it is to suggest products or services (expert systems), based on known information, or the recognition of patterns (neural networks), largely in the security sector of society, artificial intelligence is used on an everyday basis to achieve an organization’s goals. As one can easily see, both of these concepts, decision support systems and artificial intelligence, are critical factors in an organization’s success in today’s highly competitive and adaptive market of society.
Without doubt, Unilever, a world leader in consumer goods, is no exception to the rule. Two divisions in particular, its Foods and Home & Personal Care Divisions, have been involved in recent news in regards to the critical areas of DSS and AI. Unilever has implemented several decision support systems and artificial intelligence systems to help benefit the decision making of its respective Foods and Home & Personal Care divisions, which include a MicroStrategy business intelligence platform, a web-based distribution module, and a contract-management module.
In addition, two forms of artificial intelligence are also being used, a request-for-information bidding process and a request-for-pricing process, both expert systems. Each DSS and AI serves a different, and critical role in the way the organization carries out its tasks. The MicroStrategy business intelligence platform was selected to increase internal operational efficiency and employee productivity globally (MicroStrategy, 2003). This DSS will benefit Unilever because it will be capable of processing much more information/data, and at a faster rate, than any human possibly could.
This will allow Unilever to staff less knowledge workers in this area, and will still achieve the same end goal. Again, the system will not make the decision for the organization, but will give the knowledge worker involved greater insight on making the best decision possible. In summary, the MicroStrategy platform will allow for more accurate decisions, and at a faster rate, thus, carrying out the goal it was selected for, to increase efficiency and productivity levels. In order to maximize its resources, Unilever implemented a request-for-information bidding process (Bacheldor, 2003).
This expert system allowed Unilever to cut the number of its carriers from 100 down to 30, by examining the all of its carriers and finding the best solution for its needs, a job that would normally be done by an expert. This would become very cumbersome for one individual to carry out, but the expert system will analyze the system using certain parameters, and give the best possible combination of carriers. This is representative of many expert systems, including MudMan, used by engineers.
The AI system used a request-for-pricing process that allows selected carriers to submit their contracts (Bacheldor, 2003). Again, the expert system will take all contracts into consideration, and select the most competitive submitted figures. Once the carriers are selected, Unilever uses its distribution module to let the carriers view specific instructions regarding shipping. This will highly increase the rate of shipping, as well as reduce miscommunication errors between Unilever and its carriers.
By accessing the shipping instructions via the Internet, only data will be exchanged, not verbal instructions, which often leads to misinterpretation. Less errors and improved performance equals less expenses and better satisfaction levels. In a sense, this vastly improves the business alliance relationship between Unilever and its carriers. To automate and audit the creation of its contracts and any changes made to them, Unilever also launched a contract-management module (Bacheldor, 2003).
By automating the process, Unilever benefits again from quicker access to the contracts, as well as working on a smaller margin of error. After analyzing the implementation of each DSS and form of AI, it’s quite easy to see the webbing of similar benefits experienced from each. Although each system is in use for different reasons, and to achieve different goals, each one has an underlying main goal it is striving for, to maximize its resources by increasing efficiency and productivity in every aspect possible.
In this specific case of implementation, Unilever did just this; it reduced costs by approximately 10%, or a savings of nearly $25 million (Bacheldor, 2003). Question #2 A properly constructed web site can prove to be a very useful and beneficial B2C marketing tool. This doesn’t necessarily mean that the organization has to sell their products via the Internet either. However, in order to be a useful too, the site needs to contain certain aspects that will improve the customer experience. After viewing the Unilever website (Unilever. om, 2004), and more specifically, the Foods and Home & Personal Care divisions, it became obvious that the site was lacking vital pieces in order to achieve this goal. These areas include a suggestions tool available to the consumer, offering features, including promotions or special offers, complimentary services, and downloads to attract customers to the site in order to market the organization’s products, and the integration of a customer service system, whether it be via email, or even live chat.
All of these enhancements were quite evident on other sites, such as Nestle, and Proctor and Gamble (PG. com, 2003). A suggestions tool being made available to the consumer would be a great enhancement to the site. It would allow the respective division to gain feedback about its products, and allow for changes to be made if necessary. In other words, it would tell Unilever what aspects of the products should be carried on, and which improvements to be made.
This is a common practice used by many organizations, as it gains useful knowledge just the same way a prototype would of a product. An effective feature that could be easily implemented into this suggestion system could be a sign up form that consumers could voluntarily give their email address, mail address, etc. in order to receive newsletters about upcoming products, or even just important improvements being made to current products. This would serve two different purposes. First of all, it would be a great marketing strategy to get the “word” out on Unilever products.
Secondly, it would show the consumer that his/her opinion really does matter, and that it is being used to change the products in order to satisfy the consumer’s needs/wants. In addition to having an online so-to-speak “suggestion box,” another enhancement to the site would be the offering of more features, in the forms of timely promotions, complimentary services to the line of products, entertainment downloads, etc. in order to attract consumers to the site, and entice them to view all of the various products being marketed, while achieving an unsurpassed customer satisfaction level.
As the targeted majority of Unilever products happens to be female, maybe the addition of complimentary recipes to accompany the Foods division site, or a chart on what shades of cosmetics blend well together would be a feature that would attract women to the Home & Personal Care division site. These features would be relatively easily to integrate into the site, while being cost effective as well. While browsing other successful organization’s websites- CocaCola. com, Pepsi. com, etc. the concept of promotions was a key factor on the homepage of nearly every single site; this is not a mistake, just great marketing. As the sites are largely just to serve as an informational medium to the consumer, a great benefit would be to have it serve as an advertising site as well. It’s quite possible that many consumers aren’t knowledgeable about what products Unilever sells, or even that they have never heard of the products at all. By offering promotions or product giveaways, more potential buyers may be attracted to the site, and access the links to learn about the products themselves.
The type of promotion could include, but is not limited to, online coupons that can be printed off and used virtually anywhere, sweepstakes, and even free giveaways. All of these approaches would help to persuade the consumer to try one of Unilever’s products. Entertainment downloads, such as those found on Pepsi. com, Budweiser. com (Budweiser. com, 2003), would again be dually effective. It would keep current customers coming back to the site to see if any new products are being offered, as well as serving as a “hidden” advertisement to the consumer. Hidden,” in this case, for example, if an individual accessed the Unilever website, and downloaded a desktop wallpaper or screensaver with the company logo/name, his/her eyes would see that screen quite regularly and more than likely, would make a profound impact on the goods that they buy because his/her mind would be familiar with the product, giving it an advantage over another good being sold. Since no products are perfect, and some customers are never satisfied, the integration of a customer service system would help to satisfy the needs of its consumers.
If there is a problem involved with a certain product, the first place you want the customer to turn to is the manufacturer of the product, which in this case is Unilever. A disgruntled consumer can be a great detriment to the company’s positive image. It is obvious that the best, whether in a positive or negative way, form of advertising is word-of-mouth advertising. If a customer doesn’t know how to contact the manufacturer, the more disgruntled the individual will be, and more negative comments will be made to others.
On the other hand, if a well-constructed customer service system has been implemented, the problem can be taken care of in a timely and professional manner to satisfy the customer and more than likely, retain him/her as a loyal customer. All of these enhancements will improve the customer relationship with the organization, and in different ways. Although the current Unilever site is quite informational, it lacks the pizzazz of other sites that are available by other competitors. In some ways, the site is effective, but in others, the word “dull” comes to mind.
I believe that these problems would be more than satisfactorily addressed with the addition of the discussed enhancements. It would prove to extend Unilever’s successfulness in the consumer goods industry. Works Cited Bacheldor, Beth. “Unilever Shapes Up Shipping — Project to simplify transportation services improves processes and reduces complexity. ” InformationWeek. October 6, 2003. p. 78. Marietta College Library. November 14, 2003. LexisNexis Academic Database. Budweiser. com. November 14, 2003. URL: http://www. budweiser. com . Haag, Stephen, Maeve Cummings, and Donald J,.
McCubbrey. Management Information Systems for the Information Age . McGraw-Hill Companies. 2004. p. 185-188, 193-203. “MicroStrategy Reports Sixth Consecutive Quarter of Profitability in Q2 2003; License Revenues Grow by 31 Percent Over Q2 2002. ” PR Newswire. July 29, 2003. Marietta College Library. November 14, 2003. LexisNexis Academic Database. PG. com. November 14, 2003. URL: http://www. pg. com . Unilever – International Manufacturer of Leading Brands in Foods, Home Care, and Personal Care. November 12, 2003. URL: http://www. unilever. com .