Procter & Gamble, Colgate-Palmolive and Kimberly-Clark highlighted priorities in their supply chain operations, including technology implementation and cost pressures, during the Barclays Global Consumer Staples Conference in early September.
P&G, for example, updated attendees on its Supply Chain 3.0 project, saying the initiative is bringing maximum automation to its network. Meanwhile, Colgate-Palmolive warned rising oil prices could increase material costs later this year, while Kimberly-Clark said tight freight and logistics markets could add up to $40 million in costs.
Here’s what top brass from the three branded household and personal care product makers had to say about their supply chains at the conference.
P&G Supply Chain 3.0 is in ‘full execution’
Procter & Gamble’s Supply Chain 3.0 initiative is in “full execution, meaning maximum automation” in the network, CFO Andre Schulten said.
Along with mechanization, the project, launched in 2023 to build more comprehensive systems integration, has carried digital capabilities into quality measurement and inventory management, Schulten said. The advancements will help drive productivity over the next five to 10 years.
Supply Chain 3.0’s ongoing global rollout includes capturing sensor and imaging data to replace manual quality testing and automating warehouses, including the loading and unloading trucks, Schulten said. Scaling the efforts will take the next 24 months.
Colgate-Palmolive awaits oil price impact on material costs
Colgate-Palmolive might feel the impact of rising oil prices on material costs in the back end of the fourth quarter, according to President and CEO Noel Wallace.
The company may attempt to offset those price increases through pricing and an acceleration of the company’s premiumization strategy, per Wallace. The initiative seeks to grow sales, market share and margins by developing and marketing higher-priced products with more advanced features.
“We've seen our share in the premium side not get to where it needs to,” Wallace said, referring to the North America market. “That will be a key focus for the business moving forward.”
Kimberly-Clark confronts higher logistics costs
Kimberly-Clark expects $30 million to $40 million in incremental costs in the current quarter, partly due to rising prices in a tight freight and logistics market in North America, President and COO Russell Torres said.
Another factor affecting costs in the quarter is an April fire that damaged a third-party-run distribution center near Los Angeles, Torres said. The blaze raised transportation costs because items had to be moved from the facility.
Torres also discussed network changes related to Kimberly-Clark’s pending acquisition of Kenvue. Kimberly-Clark expects to reduce logistics and procurement costs through the merger, set to close this year, by combining route-to-market and supply chain operations over the next few years, he said.
