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Kimberly Clark SCM

The document discusses a strategic alliance between Kimberly Clark and Costco, where Kimberly Clark uses vendor managed inventory to manage inventory levels at Costco's warehouses, providing mutual benefits like cost savings for both companies. It also provides details on how Kimberly Clark is able to keep Costco well-stocked with Huggies diapers through strategies like adjusting sizes, unisexing products, and ensuring Huggies is a pull product.

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shushmapennam
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784 views12 pages

Kimberly Clark SCM

The document discusses a strategic alliance between Kimberly Clark and Costco, where Kimberly Clark uses vendor managed inventory to manage inventory levels at Costco's warehouses, providing mutual benefits like cost savings for both companies. It also provides details on how Kimberly Clark is able to keep Costco well-stocked with Huggies diapers through strategies like adjusting sizes, unisexing products, and ensuring Huggies is a pull product.

Uploaded by

shushmapennam
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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STRATEGIC ALLIANCE-

KIMBERLY CLARK & COSTCO


SMITA SAHU
PIYUSH PRANJAL
VIVEK SHARMA
MANASA PRIYA
SHUSHMA PENNAM
Introduction
 Kimberly, Clark and Co. was founded in 1872 by John A. Kimberly,
Clark, Babbock & Shuttock in U.S.

 Produces mostly paper-based consumer products.

 Costco Wholesale Corporation (Costco) is the largest  warehouse club


 chain in the United States.

  It is the third largest retailer in the United States and the ninth


largest in the world.
Strategic Alliance
Distribution based strategic alliance
Kimberly uses VMI ( Vendor Managed Inventory)
Mutual benefits
Kimberly Clark (1) Cost savings in SC
(2) Huggies more popular than Pampers
Costco (1) Saves money on staffing in inventory dept.
(2) Saves money on storage.
How Kimberly Clark keeps Costco in
diapers……
Changing sizes
Return to unisex
A pull product
A cancelled order
Q1.Why are the major retailers moving toward relationships
in which the supplier manages inventory levels at the retailer?
 Buyer of a product provides certain information to a supplier of that product .

 The supplier takes full responsibility for maintaining an agreed inventory of the material
at the buyer's consumption location. 

 A 3PL can also be used.

 Rare out of stock situations

 Reduction of inventory in the supply chain.

 Vendor representatives in a store ensure the product is properly displayed and store
staff are familiar with the features of the product line.
Contd…
 Help to clean and organize their product lines for the store.
 Shared risk.
 EDI used.
 Companies using- Home Depot, Walmart , Target , J.C Penney
q2.When should a company use in-house logistics and
when should external sources be used?
Business Partnerships
• 3rd Party Logistics
• Retailer-Supplier Partnerships
• Distributor Integration
3rd Party Logistics
• 3PL is the use of an outside company to perform all or part of
the firm’s materials management and product distribution
functions
• Pros & Cons:
- Focus on core strengths
- Provides technological flexibility
- Provides other flexibilities
- Important disadvantages of 3PL
• 3PL Issues and requirements
- Know you own costs
- Customer orientation of the 3PL
- Specialization of 3PL
- Asset-owning versus non-asset-owning 3PL
Retailer-Supplier Partnership
• RSP may be used for
- information Sharing
- Consignment Sharing

Main Characteristics of RSP


Criteria Decision maker Inventory New skills
Type ownership employed by
vendors
Quick response Retailer Retailer Forecasting skills
Continuous Contractually agreed-to level Either party Forecasting and
replenishment inventory control
Advanced continuous Contractually agreed to and Either party Forecasting and
replenishment continuously improved levels inventory control
VMI Vendor Either party Retail management
Distributor Integration
• Distributors have a lot of information about customer needs and
wants
• Rush orders might be impossible to meet from inventory or the
customer might require some specialized technical expertise
• Modern information technology allows for distributors to be
integrated so that the expertise and inventory located at one
distributor is available to the others
ISSUES:
• Distributors may be skeptical of the rewards of participating in such system
• Distributors will be forced to rely upon other distributors to help them
provide good customer service
• Tends to take certain responsibilities and areas of expertise away
form certain distributors and concentrate them on a few
distributors
COMPANIES ADVANTAGE
• Lower costs.
• Adding value to product.
• Strengthening operations.
• Quick response strategy.
• Rapid replenishment.
• System wide efficiency.
• Improved technology

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