SCDigest Editorial Staff

SCDigest Editor Dan Gilmore recently sat down with Mark Jamison, Vice President of North America Customer Supply Chain for Kimberly Clark Corp., to discuss the company’s “Supply Chain Network of the Future” program. Last week, Gilmore offered his summary review and comments of that interview and program. (See Kimberly Clark Rethinks its Supply Chain.) Here is the full transcript of the interview.

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We want to move to an environment where we let inventory get pulled through the supply chain rather than be pushed. We wanted to redesign our supply chain from the shelf back, while our supply chain had really been designed from our manufacturing assets forward. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Gilmore: What was the genesis of the Supply Chain Network of the Future project at Kimberly Clark?

Jamison: Wel,l what really was the catalyst was about 4 to 5 years ago we were refreshing our supply chain strategy, and as part of that refreshment we wanted to evaluate strategies for how we wanted to go to market. 

Through that process we decided that we would spend some time with our customers and retail partners understanding what their supply chain objectives and goals were, and then match the capability of our physical distribution network against those goals. 

Our retail partners told us three things – help us improve customer service and reduce out-of-stocks, help us take inventory out, and help us reduce cycle time - three of the key priorities they shared with us. 

And as we looked at our physical distribution network four years ago or so and compared it to those goals that our retail partners had, and as we looked to the future we knew that we had to change if we were more effectively going to meet those objectives. It would be hard to make much additional progress with our current network.

The second key thing that drove us was we felt there was an opportunity to become more cost effective in our supply chain.  So, first and foremost we wanted to become more flexible and responsive with our supply chain design, and secondly we wanted to realize significant cost savings.

Gilmore: In addition to better meeting customer needs, were there some obvious pain points in the existing network?

Jamison: Yes, we were feeling some pain from the perspective that as our businesses had grown, our strategy had been primarily to ship direct from producing plants warehouses. And as we invested our capital over time we primarily invested in the plants and machines, we did not invest much in additional warehouse space for those plants and mills. 

So as inventory required to support business needs grew, we ran out of space in those plant DCs and we went into overflow warehouses.  So we were feeling some pain from a complexity standpoint. We felt our network had become more complex than it needed to be and that we needed to right size it and change how we went to market.

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Gilmore: How did you create a “driving force” for the project?

Jamison: Like I said, we spent time talking with customers and we redefined our strategy.  I think the other thing I should share with you is that the cornerstone of that strategy is to evolve to a demand driven supply chain. That is a real change for us. 

We want to move to an environment where we let inventory get pulled through the supply chain rather than be pushed. We wanted to redesign our supply chain from the shelf back, while our supply chain had really been designed from our manufacturing assets forward. We wanted to integrate key business processes and systems so that we were highly integrated both with our partners and suppliers and could create end-to-end visibility within the supply chain. 

Gilmore: How did the effort unfold?

Jamison: The first major step was redefining our strategy. Once we realized that we really wanted to change our physical distribution network and how we went to market, the next step was to get into some rather intense modeling. That was a real key step for us. 

We evaluated a range of opportunities, we evaluated our current capabilities to meet customer requirements, those goals they talked about, we evaluated the cost impact, and we looked at the feasibility of a number of options. That was probably a 6- to 9-month effort, doing the modeling right and figuring out exactly where we wanted to end up.

Gilmore: That analysis is a big effort. Did you use outside help?

Jamison: Well actually we have a fairly robust supply chain analysis team within Kimberly Clark.  We used our own models and we basically committed that team almost full time to this project for 9 months.

I should add the one other thing we did do as we went through the modeling is that we formed an informal board of directors. We asked experts in the industry to review our plans and modeling efforts as we went through this – we met 3 or 4 times with them and asked them to critique our thinking, our modeling work, our ideas – and they gave us pretty good insight that helped us find some of our plans.

We had people from academia, we had people from 3rd party logistics suppliers, etc., as part of that advisory team.

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