Professional Documents
Culture Documents
Colgate-Palmolive
SAP Customer Success Story
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CHAPTER 5
The capabilities of mySAP SCM are critical to enabling Colgate to take the next logical steps in enhancing global supply-chain performance.
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Demand planning
Colgate U.S. uses mySAP.coms demand planning capabilities and the mySAP SCM collaborative engine to provide a tool for communicating demand information to supplier and synchronising planning across the supply-chain network. mySAP SCM statistically computes the base demand to drive repeatable replenishment processes and incorporates changes resulting from promotions. Promotional demand management independent of base demand represents crucial information for driving manufacturing, product nishing, and distribution. The collaboration engine supports the collaborative process for promotional demand by enabling the exchange of up-to-date planning information, exception-based management, and tracking of performance measures like forecast accuracy.
Realising benets
The three major components of Colgates supply-chain strategies are supported by mySAP.coms real-time integration model, where changes in stock, sales orders, and other relevant parameters are updated in real time between customer and internal ERP systems and mySAP SCM. This ensures that modications to the plan can be enacted rapidly, which is especially important for planning promotions. Colgate expects to multiply the impact of the current implementations signicantly as its VMI, CBS, and collaborative engine implementations are rolled out to all brands and plants. Improved visibility throughout the supply chain means accurate, up-to-date, consistent data will be available to support management decisions concerning tactical and strategic plans. Colgate will also use mySAP Business Intelligence (mySAP BI) for quick access to even more consolidated and ner-grained information to support decision making throughout its organisation. Through its supply-chain initiative, Colgate is now better positioned to contend with the forces driving the consumer products industry today, including price competition, expanding global trade, and the use of promotional campaigns. These business drivers are motivating Colgate to pursue continued cost reductions through all aspects of its business and to leverage collaborative tools that improve links with its global customers. Colgate is also working to leverage e-business tools that strengthen both internal integration as well as links with partners and customers.
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Continuous improvement
Even with its successes to date, Colgate continues to pursue supply-chain improvements that will enhance its competitive position. In addition to extending the use of VMI, CBS, and the collaborative engine globally, Colgate is working with SAP to develop repetitive manufacturing functionality in mySAP SCMs production planning and detailed scheduling capabilities. This will enable repeated production runs using a single bill of material (BOM), back ushed material requirements, production alterations arising from short-term changes in demand, and the ability to distinguish making versus nishing as separable manufacturing processes in Colgates promotion-driven environment. Colgate is also supporting development of a mySAP SCM -related wave algorithm to optimise repetitive manufacturing amid potential sudden peaks and valleys in requirements and nite-capacity constraints. Because supply requirements vary in a promotions-driven environment, third-party manufacturing contractors are becoming increasingly important to Colgates business. Colgate expects to leverage mySAP SCM-enabled collaborative planning link with these contractor as well. Colgate is also planning to use mySAP SCMs transportation planning and scheduling capabilities to optimise its transportation network and to realise additional cost savings. Colgate will also pursue various forms of collaboration with customers and partners by participating in consumer goods industry marketplaces that provide exchanges for collaborative demand, procurement, and logistics planning. While moving quickly to achieve these and other goals, Colgate has already realised its many objectives through mySAP Supply Chain Management: supply-chain visibility, increased planning-cycle speeds, efcient asset utilisation through global sourcing, reduced costs, and better customer service.
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Business in brief
Colgate is continually improving its operations to maintain and extend its leadership position in worldwide consumer packaged goods. Focusing on the supply chain, Colgate wanted to upgrade performance by replacing a regional sourcing model with a fully globalised supply chain to improve service to retail and internal customers and to reduce inventory and total delivered costs.
Solution differentiators
Colgate chose mySAP Supply Chain Management for its tight integration with the core SAP enterprise solution. The SAP Advanced Planner and Optimiser (SAP APO) element of mySAP Supply Chain Management also provided functions that open a window onto global logistics information; advanced mathematical planning functions to optimise worldwide operations; and a global platform for customer and partner collaboration.
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