1 / 22

How Kimberly - Clark Keeps Costco in Diapers

How Kimberly - Clark Keeps Costco in Diapers. Hüsnü Dalgıç Süleyman Onay. Outline. 1. Background 2. How to success with Vendor Managed Inventory (VMI) & Advantages 3. Results & Additional Facts. Background. FMCG( Fast Moving Consumer Goods ) World Has Been Changed.

chantale-wooten
Download Presentation

How Kimberly - Clark Keeps Costco in Diapers

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. HowKimberly-ClarkKeepsCostcoin Diapers Hüsnü DalgıçSüleyman Onay

  2. Outline 1. Background 2. HowtosuccesswithVendorManagedInventory(VMI) & Advantages 3. Results & AdditionalFacts

  3. Background

  4. FMCG(FastMovingConsumerGoods) World Has BeenChanged • Retailersconsolidation & globalization • Increasingpower of retailers • Shiftingbalance of powerfromsupplierstoretailers • Increasingpressure on profits • Moreneed of efforttokeepretailers as thecustomersforsuppliers

  5. An Overview of Kimberly-Clark Company • Agiant FMCG Company headquarted in Dallas, Texas • 56,000 employees in 35 countries worldwide • 2009 Annual Sales of $19,1 billion • Kimberly-Clark’s Global Brands are sold in more than 150 countries • Well-known family care and personal care products • No. 1 or No. 2 share position globally in more than 80 countries

  6. Kimberly-Clark Brands

  7. An Overview of Costco • A Retail Company headquarted in Issaquah, Washington • The largest warehouse club • 68,000 US Workers • $61 Billion Company with 500 stores most of which located in the US

  8. DiapersCategory - “Pull “ product • Shoppersgospecificallyto buy • Ifcouldn’tfindgoanotherstore! • Pressuretokeep in inventoryforretailers • Price-conciouscustomerwants as cheap as possible • ConsumerConfidence: Must always be on the shelf in order to keeployal • No stock-out or excess inventory

  9. WhyCostco is importantforKimberly-Clark • Costco is a giantcustomerforKimberlyClark • Onlynationaldiapersbrand in Costcostores • HarshCompetitionamongsuppliers • NeedtokeepCostco • Need a ValueAddition • Focus: CostReduction + Spot & fixInefficiencies (AvoidStock-out) • Businessmodelsarechanging…

  10. HowtoSuccesswithVendorManagedInventory (VMI) & Advantages

  11. Coscto & Kimberly-Clark Partnership • Businessmodelsarechanging • StrategicAlliancesbecomemore popular & powerful • Multi-faced • Goal-oriented • Long-term • Commitment of manysources • Types of StrategicAlliances • QuickResponseStrategy • ContinuousReplenishmentStrategy • VendorManagedInventorySystem

  12. Coscto & Kimberly-Clark Partnership (Vendor Managed Inventory) • VendorManagedInventory (VMI) • Inventory policy responsibility to the supplier • Advanceinformationsharingwithhighlevel of technology • Became famous with the partnership between P&G and Wal-Mart 1985 • Wal-Mart sales increased at 20-25% • Inventoryturnover improved 30%.

  13. Coscto & Kimberly-Clark Partnership (Vendor Managed Inventory) • Assumption: Suppliers have better position to find and solve the inefficiencies in the supply chain • Responsibility on Kimberly-Clark thrudiapersinventory on shelves • Works on past data, analysis on stock levels • Verydetailedsalesinformationsharing • Forecasts & shipped • Improvedtechnology - computer link

  14. Advantages • Focus on CoreStrengths • CoreStrength = CompetitiveAdvantage • Managing the supply chain for diapers is not Costco’s core strength – UNNECESSARY • Reduced • staffin supplychain • inventory holding cost CostReduction

  15. Advantages • TechnologyFlexibility • Betteralliancerequiresadvancedtechnology • Technologychangeseveryday • Expensive • Need of continuousinvestment • Leave it toKimberly-Clark CostReduction

  16. Advantages • Lesslevels of out-of-stock • Out-of-stock = Not available on theshelf • Loss on potentialsales • Costco: Category management is based on 2 brands: 1 PL, 1 National Brand Out of Stock = Out of Category • According to P&G, an average retailerloss is 11% of its annual sales

  17. Results & AdditionalFacts

  18. Results • -Kimberly-Clark • - Enlarges the program and manages another 44 retailers • One company explained that they saved $200 M, another one $75 M • -51% increase in net income • -Lessvarietyeasiertracking: Stoppedseperateproductsforboys & girls • -Sameprinciplestoitssuppliers – 50% reductionover 2 years in storage • -Costco • -Out-of-Stock ratio is drastically decreased • -Efficientcost-reduction • Decreasedinventory holding cost • Reducedstaff in supplychainmanagement • -Shifting from one-month supply to 2-weeks supply

  19. Results -Consumer -Fewer sizes and less varieties (Unisex Diapers) -Lower Prices - Smaller package sizes: Adaptation according to consumer behavior -Moreavailability on the shelf

  20. AdditionalFacts • Importantpoints on accuracy • Point-of-sale • Inventorylevel • Shipment • Delivery • Customerfillrates • RespecttoConfidentiality BetterCommunication BetterCooperation

  21. THANK YOU!

More Related