Kimberly-Clark’s venture with Lever Fabergé in
the Netherlands encouraged other companies to take
the plunge into shared distribution. “It was the starting point for what is now known as collaborative
supply chains in Europe,” says Peter Surtees,
Kimberly-Clark’s director of supply chain for
Europe. “Collaboration now is a big thing in Europe,
especially for CPGs (consumer packaged goods companies).” The concept of shared supply chains has
proved so attractive, in fact, that a nonprofit organization has been formed in Europe to foster such collaboration among other CPG companies, retailers,
and third-party logistics companies.
For Kimberly-Clark, its positive experience with
collaborative distribution in the Netherlands
prompted the consumer goods giant to extend that
program to additional countries and business partners. Here is a look at how the program works and
what the company has accomplished to date.
MORE DELIVERIES, SAME COST
Kimberly-Clark, a 140-year-old company headquartered in Irving, Texas, USA, makes an assortment of
personal care products, including such well-known
items as Kleenex facial tissues, Huggies diapers, and
Scott’s paper towels. In 2010 it reported worldwide
revenue of US $19.7 billion from sales in more than
150 countries.
In Europe, Kimberly-Clark sells its products in 45
countries and operates 15 factories. Finished goods
are stored in 32 distribution centers, all of which are
operated by third-party logistics (3PL) companies.
Back in 2003, some retailers in the Netherlands
were trying to restock store inventory based on
point-of-sale data, which would allow them to make
replenishment decisions based on actual customer
transactions. As part of that initiative, the retailers
wanted to increase the frequency of deliveries and
resupply stores by replenishing only what had been
sold. But this did not jibe with Kimberly-Clark’s
practice of delivering in full truckloads. “Our Dutch
customers did not want full truckloads,” Surtees says.
“They really wanted us to deliver more frequently to
align to point-of-sale data, so we would be replenish-
ing more in real time.”
The question facing Kimberly-Clark, Surtees says,
was this: How can we shorten the replenishment
cycle and stop delivering full truckloads without
incurring additional transportation costs?
