Other supply chain executives that I have spoken with have told me about the "aha" moment when their supply chain users finally got the real-time or more up-to-date data they had always wanted. Did this happen at Kimberly-Clark?
It did, when we implemented APO. Now, we won't realize the full benefit of our integration until our order-to-cash is fully implemented, which I mentioned earlier. But when we implemented APO, our production planners saw an immediate improvement to their ability to service promotions because of improved visibility to real-time demand information.
Kimberly-Clark has been a major driver on RFID adoption. What can you tell me about RFID in 2007 and how you are currently using the technology?
The first thing I would tell you is our strategy around RFID has been to focus on business processes and develop repeatable, scalable business processes that are enabled by the technology. The reason I start out with that is you read today a lot about whether companies are getting value from RFID. When we dug deep into those examples, it was because [those companies] really operated in a "slap and ship" mode. The technology in and of itself is not going to bring value to the supply chain. The value to the supply chain comes from reengineering your business processes and enabling that new business processes to work with the technology.
Can you give an example of where it's working now?
Our focus is on redesigning business process and finding a way for the technology to support that process. A perfect example of that is in what we've done in the area of promotional execution. We found that only 55 percent of the time our promotional displays were moving to the floor in time to meet our promotion, or advertising, dates. And that was missing a real opportunity to get that product out to our customers along with our retail partners.
So we redesigned the business process that tracks execution of our retail displays on sales floors. We developed daily reports, based on real-time data, and we included our retail operations people in the process so that on a daily basis we can identify those stores which have not executed the promotions. The retail operations people can then be dispatched to go into the stores of our retail partners, and we can get that display and product immediately on the floor.
Shortly after we implemented the new process that was enabled by the technology, we saw our execution of promotional displays improve from 55 percent to over 75 percent. We also saw a corresponding increase in point of sale. So while we saw the execution improve, we also saw sales increase at a corresponding rate. And I just think that's an excellent example of how RFID, in combination with redesigning a business process, can have big effect on the supply chain.
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