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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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