Moving Co-Packing In-House Nets Kimberly-Clark Huge Savings
Integrating co-packing into existing warehouse operations has shortened inventory lead times and yielded millions in savings.
(Boonton, NJ, October 14, 2011) In a move being closely watched in the distribution industry, Kimberly-Clark has taken over co-packing of consumer goods such as tissues, diapers and baby wipes.
For example, if the $20 billion-a-year company wants to promote, its Little Swimmers diapers by attaching a bottle of sunscreen to the bag. Instead of hiring a co-packer to create the packages, Kimberly-Clark does the work itself in its distribution center.
Bill Lindeke, who until recently was director of distribution operations for family care at Kimberly-Clark tells Distribution Center Management, that the integration has shortened inventory lead times and yielded significant savings.
Just what kinds of savings? Lindeke provides some details:
- Freight: 60%
- Inventory carrying costs: 20%
- Labor: 15%
- Damage: 5%
An article in the October issue of Distribution Center Management newsletter details how these savings were achieved.
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