INTRODUCTION OF COLGATE-PALMOLIVE:
Colgate-Palmolive is among the leading Multinational Corporations that has been give top ranking in the consumer products category. It has its headquarters in New York and it is believed to have an asset of $94 billion that comprises of all its products that it is selling in more than two hundred countries. Colgate-Palmolive is involved in the business of manufacturing and selling of various consumer products that comprise of cleaning products, soaps, toothpastes and pet supplies; it has broadly classified its products into two categories i.e. Oral, Personal and Home Care and Pet Nutrition (“Supply Chain Management”, 2012).
COLGATE-PALMOLIVE COLGATE-PALMO LIVE VISION AND CORE VALUES: The vision statement of Colgate-Palmolive is “To offer products on the basis of three core values i.e. global teamwork, caring c aring attitude and improvement on continuous con tinuous basis”. Th e core valu valu es of the t he company are as f oll ows: ows:
To offer growth opportunities to the company’s employees both on professional and personal levels.
To fulfill all Corporate Social Responsibilities as a key member of the community on global level.
To enhance the value of shareholders.
To develop processes and policies that will ensure that the company is able to strengthen its position in the market and respective industry.
To explore all latest initiatives and opportunities that are existing in the market.
PRODUCTS:
Oral Care:
Tooth pastes
Sparkle
Tooth Brushes
Personal Care:
Beauty Soap-Palmolive Natural
Carbolic Soap- Azadi
Skin Germ Protection Soap
Surface Care:
Max Bar
Max Liquid
Max Anti Bacterial
Fabric Care :
BRITE max powder
MISSION OF SUPPLY CHAIN OF COLGATE- PALMOLIVE Colgate-Palmolive’s mission of sup ply chain is to :
Reduce total delivered cost
Extend technology resources
Develop excellence in purchasing
Logistics and sourcing processes
PROCUREMENT PROCUREMENT AT COLGATE-PALMOLIVE DECISION CRITERIA:
Fair and uniform consideration is given to suppliers.
Bu yin g behavior behavior is base based on f oll owin g objective objective cri ter ter ias
Price
Quality
Suppliers Reliability
Suppliers Integrity
Innovation
Commitment to Improve continuously
POTENTIAL SUPPLIERS:COLGATE-PALMOLIVE is expecting following things from the potential suppliers
Creativity
Value Addition
High focus on Customer service
Use of Technology 7
DISTRIBUTION AT COLGATE- PALMOLIVE LOGISTICS:
They have their own fleets for transportation of goods. But their distributors some time source the transportation and the decision for the selection of third party logistic is decided on the basis of term and condition con dition and from the budget of distributor.
Colgate-Palmolive addresses the total movement of materials and products through the supply chain starting with our vendors and concluding with the customer, with the goal of optimizing cost and service.
They support the application of product replenishment based on “pull” strategies as
these come close to addressing true customer demand.
They use strategic modeling tools as part of continuous improvement studies and assessments to evaluate and determine least cost.
It adapts best practices in a way to recognize differences in needs between emerging, developing, and developed markets in which they sell their products.
Identification and application of integrated enterprise-wide information management systems is highly influenced.
Participation in key industry groups to broaden skills and to benchmark best practices is highly aimed.
Identification and alignment with select global third-party providers to jointly seek logistics efficiencies.
DISTRIBUTION CENTRES: They have approximate 10-14 distribution centre in Karachi. Distributor use SHEHZOOR most of the time in vehicle. 10
GOAL : Colgate aimed to upgrade supply chain performance worldwide by replacing a regional sourcing model with a fully globalized supply chain built around vendor-managed inventory (VMI) with key accounts, cross-border sourcing, and collaborative planning with downstream subsidiaries. The business objective: improve service to retail and internal customers and reduce inventory and total delivered cost.
PROCESS/TOOLS: Colgate selected my SAPTM Supply Chain Management (my SAP SCM) to provide instant, real-time access to information about orders, forecasts, production plans, and key performance indicators such as inventory levels and fulfillment rates
SUPPLY CHAIN STRUCTURE OF COLGATE-PALMO COLGATE-PALMOLIVE: LIVE: In order to solve the main issue of Colgate-Palmolive, Colgate’s global supply chain system was developed; the three key supply chain strategies that formed the basis of this system. The first one was the introduction of the Vendor Inventory Control (VMI) product so that there was a decline in the inventory channel and timing of the cycle as well. The second strategy was the implementation of a resource planning system at cross-border level so that regional models were developed for the international patterns; it ensured that the company had adequate pool of assets so that there was a balance with the company’s business
strategy. The last and final strategy was implementation of a collaborative program that ensured there was a well-balanced downstream business system for effective management of the market demand of supply chain along with effective coordination of the system’s activities. With the
help of new system, everyone in the organization is well-aware of the supply chain statistics; the IT system has enhanced the company’s SCM system which has helped in utilizing the supply
chain information with accuracy so that the consumers always had easy access to the products and the shortage problems was reduced by 50% in the first three months of the SAP R/3 implementation.
Fig : Supply Chain Process In Colgate Palmolive
FACILITIES : In Overseas, Colgate operates approximately 280 properties of which 76 are owned in over 70 countries. In the U.S. the Colgate operates approximately 60 properties of which 15 are owned.
CHANNEL DISTRIBUTION: Channels of Distribution Colgate Palmolive are so large of a company, it is impossible to specifically identify their particular distribution strategies. Products are shipped to a single distribution center. From their, the various products are distributed to markets. Colgate Palmolive has a channel of distribution classified as starting from the manufacturer, then on to an intermediary distributer, and finally to the retailer
TRANSPORTATION TRANSPORTATION : Colgate Palmolive is a worldwide manufacturer that has operations in several continents. Colgate Palmolive co-operates with a global shipping company called Magellan Transport Logistics. Magellan Transport is very beneficial to Colgate Palmolive so they're using only one transport company for all of their operations. The company partakes in would be trucking, for all transport of goods throughout their channels of distribution. Trucking is the most efficient form for this company because as they have operations split up in different continents, there isn't any water to go over, and trucking can go directly to all of the members of Colgate channels of distribution.
Colgate Logistics Delivers Smiles Cutting logistics costs makes management happy. Sharing savings and collaborating to improve efficiency makes customers and suppliers happy. And when it all hits the bottom line, even Colgate's investors start smiling.
• Distribution channels are continuously shifting and evolving, and Internet sales are growing.
Meanwhile, the company has migrated away from doing its own manufacturing toward a blend of contract manufacturing and Colgate-operated plants. To that end, it has trimmed its 157 manufacturing plants to 80 sites. • Another step Colgate took was to implement a transportation management system (TMS) from
Transplace, a 3PL and technology company based in Dallas, Texas. The TMS filled some information gaps in shipment consolidation, tracking and tracing, and reporting. • Going forward, Colgate wants to work with customers to find opportunities for improving costs
and efficiencies. If Colgate can work with customers to shift some morning deliveries to the afternoon, or consolidate shipments with another company, • Colgate has also developed a cost-to-serve model that helps track statistics such as warehouse
costs by customer and by customer ship-to location
Salient Features of the whole process and its competitive advantage: advantage: • All the efficiency improvements, better customer service, and lower costs reap another benefit. • Factor in the improvements in Colgate’s imports, shipment consolidation, and proprietary
Excellence in Driving Growth through Efficiencies (EDGE) program, an d the totals climb to four million miles, 700,000 gallons of diesel, and more than 7,000 tons of carbon emissions. • Colgate’s openness to improvements that are mutually beneficial for the company, its
customers, its suppliers, and the environment. • Customers ship Colgate’s product together with competitors’ products and store them together.
Colgate’s stated goal may have been to remove miles from the network, but the broader
supply chain context and openness to internal and external collaboration opens the door for continued success. Colgate took more than four million miles out of its network while handling five percent more cases of product. When all of that trickles down to the year-to-year financial results, it’s bound to bring a smile to investors’ faces.
CHALLENGES AND OPPORTUNITIES OPPORTUNITIES • Increase warehouse throughput • Replace custom RF transactions with standard, flexible SAP solution • Separate warehousing from enterprise resource planning operations for performance intensive
environment
IMPLEMENTATION HIGHLIGHTS : • Rolled out software in 10 months mon ths to high-volume distribution centers in Latin America • Used internal project management process • Worked with the business owners to understand unde rstand processes during as-is analysis • Developed scenarios, reviewed them with the business users • Tested real-life scenarios
CONCLUSION Colgate improved customer order fulfillment rates to 95 percent. It improved on-time and complete orders from 70 percent to 98 percent for VMI replenishment. It lowered inventory by 10 percent and reduced overall order cycle times. Colgate also increased compliance levels for intra-company replenishment. SAP SCM capabilities are critical to enhancing Colgate’s global supply chain
performance. SAP SCM enables Colgate to gain visibility into global logistics lo gistics data. It allows the company to optimize operations through the use of advanced mathematical planning functions. And it provides a platform for collaboration with Colgate customers and partners. By leveraging SAP SCM, Colgate is progressing toward excellence in supply chain planning across worldwide operations.
