BY JAMES A. COOKE, EDITOR AT LARGE DEMAND PLANNING
technologyreview
Kimberly-Clark
connects its supply
chain to the store shelf
In its quest to achieve a demand-driven supply chain, Kimberly-Clark turned to software
that generates shipment forecasts based on point-of-sale data. The move has allowed the
consumer products giant to better serve some of its customers with a lot less inventory.
This story first appeared in the
Quarter 1/2013 edition of
CSCMP’s Supply Chain
Quarterly, a journal of thought
leadership for the supply chain
management profession and a
sister publication to AGiLE
Business Media’s DC VELOCITY.
Readers can obtain a subscription
by joining the Council of Supply
Chain Management Professionals
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FOR THE PAST SIX YEARS, KIMBERLY-CLARK CORP. HAS BEEN ON A
mission to connect its supply chain to the store shelf. The manufacturer of personal-care products wanted to create a demand-driven supply chain that would
make and warehouse only the precise amount of inventory needed to replace
what consumers actually purchased.
The company had good reason to make this one of its top priorities. “If we
align our activities to what’s happening on the shelf, we can take a lot of cost,
waste, and inventory out of the system,” explains Rick Sather, Kimberly-Clark’s
vice president of customer supply chain for North America consumer products.
That’s easier said than done, of course. The roadblock for Kimberly-Clark
was that its store shipments were based on historical sales forecasts, which were
not very accurate predictors of future sales. To match shipments with actual
demand, the company would need to use point-of-sale (POS) data from consumer purchases as the basis for replenishments to grocers and retailers.
Toward that end, the manufacturer began using software that utilizes sales
data to generate forecasts that trigger shipments to stores. To date, only three of
Kimberly-Clark’s largest customers are participating in the program, but the
results have been notable. These demand-driven forecasts, which are more
accurate than the historical sales forecasts, let the manufacturer better serve
those customers but with much less inventory.
SHIFTING FOCUS
Based in Irving, Texas, a suburb of Dallas, Kimberly-Clark makes such well-known personal-care products as Kleenex facial tissues, Huggies diapers, and
Scott paper towels. Its worldwide sales exceeded $21 billion in 2012.
