verticalfocus
BY MARK B. SOLOMON, SENIOR EDITOR
CONSUMER GOODS
nothing to sneeze at
The changes Kimberly-Clark made
IT GOES BY THE SPACE-AGE–SOUNDING MONIKER OF “NETWORK
of the Future.” In reality, though, Kimberly-Clark Corp.’s four-year effort to
transform its North American supply chain is grounded in one of manufacturing’s oldest, though sometimes neglected, principles: Produce to meet
your customers’ needs, not your own.
For decades, the venerable Dallas-based manufacturer essentially operated two distribution networks for consumer goods: One for its line of family care products, like Kleenex tissues and Scott towels; the other for its personal care portfolio, which includes Depend undergarments and Poise blad-der-control pads. Most of the company’s 130 warehouses and distribution
centers— 60 dedicated to its factories and 70 public facilities—were conveniently (for Kimberly-Clark) located near its plants. That the facilities were
not strategically positioned near the company’s customers was not much of an issue.
About five years ago, it became one.
A network that had run smoothly when the manufacturer had a relatively limited product line
became complex and unwieldy as the number of stock-keeping units (SKUs) doubled over a 10-year
period. Capacity constraints kept K-C from consolidating all SKUs at any one location; the facilities
handled either personal care or family care inventory, but not both. As a result, retailers had to place
separate orders for personal and family care products and receive them in separate shipments instead
of a single truckload.
Sometimes, K-C would run out of space in the warehouses adjoining the plants and would have to
find overflow facilities that typically were not located near its customers. This situation forced the
company to ship to and from multiple locations in order to deliver products to customers, raising
to its distribution network may not
be groundbreaking. But they’ve
saved the maker of Kleenex and
other paper products 22 million
gallons of fuel and taken service
