Kimberly-Clark accelerates transformation with a focus on automation and efficiency
Strategic plan includes automation, supply chain digitalization and R&D investments, expected to generate billions in savings and productivity
Kimberly-Clark, a global leader in health and hygiene products, is moving forward with its organizational restructuring, with an emphasis on modernizing the supply chain and adopting advanced technologies. Since October, the company has been operating under a new organizational model designed to boost efficiency and stimulate sustainable growth.
The overhaul covers three main areas: simplifying the value stream, optimizing the manufacturing network and digitizing the supply chain through automation and robotics. “This is about rolling out state-of-the-art software in both procurement and supply and demand planning, which we’re already doing, as well as accelerating the adoption of robotics across the entire network”, said Kimberly-Clark CFO Nelson Urdaneta during the recent Morgan Stanley Global Consumer & Retail Conference.
BENEFITS AND TRANSFORMATION GOALS
With these changes, the company aims to improve visibility throughout the supply chain, as well as strengthening integrated margin management. “It starts with revenue growth management strategies. It follows on to risk management strategies on commodities and costs, as well as maintaining very strong discipline on costs across the enterprise — all at the service of driving higher gross productivity and higher margins”, said Urdaneta.
The transition also aims to prepare Kimberly-Clark for future challenges, such as possible supply chain disruptions due to trade tariffs. However, the company is confident in its operational structure in the U.S., where most of its products sold are manufactured locally.
STRATEGIC INVESTMENTS
Under the leadership of Tamera Fenske, the company has been directing efforts towards optimizing processes since July, while Craig Slavtcheff and Patricia Corsi are leading innovation and growth fronts. R&D investments are focused on the invention of materials, product design and innovation in manufacturing processes.
With a total investment of US$ 1.5 billion for the restructuring, Kimberly-Clark expects to achieve more than US$ 3 billion in gross productivity and US$ 500 million in capital savings, as well as estimated annual cost savings of US$ 200 million.
Kimberly-Clark reinforces that integrated margin management will be key to consolidating its competitive position. “Integrated margin management is not new for the world, but it is new to us”, concluded Urdaneta.
