COLGATE- PALMOLIVE

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 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 attitude and improvement on continuous basis.
The core values of the company are as follows:

To offer growth opportunities to the companys 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-Palmolives mission of supply chain is to :

Reduce total delivered cost

Extend technology resources

Develop excellence in purchasing

Logistics and sourcing processes

PROCUREMENT AT COLGATE-PALMOLIVE DECISION CRITERIA: Fair and uniform consideration is given to suppliers.
Buying behavior is based on following objective criterias

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 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-PALMOLIVE:

In order to solve the main issue of Colgate-Palmolive, Colgates 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 companys 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 systems 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 companys 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 :
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:

All the efficiency improvements, better customer service, and lower costs reap another benefit.
Factor in the improvements in Colgates imports, shipment consolidation, and proprietary
Excellence in Driving Growth through Efficiencies (EDGE) program, and the totals climb to four
million miles, 700,000 gallons of diesel, and more than 7,000 tons of carbon emissions.
Colgates openness to improvements that are mutually beneficial for the company, its
customers, its suppliers, and the environment.
Customers ship Colgates product together with competitors products and store them together.

Colgates 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, its bound to bring a smile to investors faces.

CHALLENGES AND 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 to high-volume distribution centers in Latin America
Used internal project management process
Worked with the business owners to understand 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 Colgates global supply chain
performance. SAP SCM enables Colgate to gain visibility into global logistics 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.