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Kimberly-Clark supply chain story & data quality Presented by Mario Carniato

9/28/2010 One K-C, leading the world in Essentials for a better life

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AGENDA

Who we are Background: Project DANE Data integrity at KCA, and GS1net/NPC

Questions – any time

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Who are we? Global marketer of leading brands. Hold the No. 1 or No. 2 brand share position in more than 80 countries. Every day, 1.3 billion people in 150 countries - nearly a quarter of the world's population - trust K-C brands and the solutions they provide to enhance their health, hygiene and well-being.

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Our retail brands

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Innovator We invented 5 of the 8 consumer categories in which we compete.

1890 Bathroom Tissue On A Roll

1920 Feminine Pads

1907 Paper Towels

1989 Disposable Training and Youth Pants

1924 Facial Tissue

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Kimberly-Clark Australia Subsidiary of KCC Over 1600 employees nationally - many diverse backgrounds Annual sales revenue of approximately A$1 billion Committed to being social and environmentally responsible corporate citizen Values of care, innovation & sustainability drive all that we do, from our brands to the way we treat our employees, our customers, our community and our environment Kimberly-Clark New Zealand reports into KCA There are three businesses that make up KCA: – – –

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Consumer (= grocery/retail) Professional (= commercial/industrial/away from home) Health Care

One K-C, leading the world in Essentials for a better life

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Site Locations - Australia

Brisbane

Perth Adelaide

Manufacturing Sites   

Sydney – Ingleburn Diaper Mill Albury – Nonwoven Mill Millicent – Tissue Mill - Tantanoola Pulp Mill

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Millicent

Albury Melbourne

One K-C, leading the world in Essentials for a better life

Sydney

Distribution Centres     

Brisbane Sydney Melbourne Adelaide Perth

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Sample High level process overview: Ingleburn production sent by RORO to Sydney NDC for Putaway into ASRS 0 mins

Robot forms full Pall

2 mins

S/W, LPA

RORO Conv

ASRS-compliant Palls: Wrap & Print+apply 2 identical accurate SSCC labels, send real time production record to ERP.

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10 mins

Accum & scan 48 SSCCs to form a load

30 mins

Load RORO Veh & depart

60 mins

NDC RORO unload

Send “Load file” to ERP. Create stock transfer & Shipment, Post GI, send ASN (Type1) to NDC-WMS

One K-C, leading the world in Essentials for a better life

65 mins

DeStack & Scan SSCC

WMS perform “Stock Entry” vs ASN & send i/face to ERP, each pall.

70 mins

ASRS putaway (or xdock)

WMS send “put-away” i/face to ERP. Stock now AVAIL

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Some Principles of DC design, innovation Streamline and simplify (the network, processes, systems, decision making, SKU range(?), etc). Automate the simple/routine/repetitive where feasible (using GTINs, SSCCs, barcode scanning, ASNs etc) Maximise reliability of process execution (so processes always execute as intended and never go wrong. Zero waste). Ensure integrity of master data and SSCCs etc. Standardise & control by using GTINs, SSCCs, barcode scanning, automation, PMs etc. Eliminate waste (unnecessary steps & delays, excess travel, error & re-work), enabled by automation & process reliability. Integrate multiple systems in real time, including via ASNs. Accelerate information and physical flows. Speed to market.

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One K-C, leading the world in Essentials for a better life

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Technology Components in the DC Accurate master data in the “master� ERP system, then synchronised to the other multiple systems (LPA, WMS) Multi-system real time integration (ERP, WMS, RORO, TMS, Production control, LPA) GS1 standards for GTINs, SSCC labels & barcode scanning GS1 standards for EDI messages (ie ASNs) for advance notice of inbound loads and control of accelerated receiving RF (radio frequency) for real time wireless communication between WMS and warehouse resources Automated and conventional materials handling Multiple storage and picking methods to suit Pall, CS, EA

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Data integrity needed to support lean processes Data integrity is the foundation for all business functions, especially if they are computer-supported, and particularly if they are automated and/or fast flowing. Without high data integrity, the basic information which underpins systems, transactions and processes is significantly wrong. Decisions and transactions are often wrong, therefore users can’t “trust” the system. Hence users must manually intervene in every process, and many users resort to keeping separate records which they prefer to trust. Rubbish in = rubbish out2 Error, waste and delay will repetitively occur, which then necessitates more effort in validations, reconciliations and re-work. Often, whole procedures and departments can be built to accommodate the fact that things go wrong. Fixing errors is built into people’s jobs. IE the errors are “institutionalised” and become part of “the way we do things”. They become invisible!

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Results of recent GS1 Data Quality Audit at KCA (imported SKUs, suspected of being poorly controlled) The audit hit 907 externally purchased SKUs comprising 1526 packaging levels (ie GTINs for outer packs, inner packs etc) 323 Materials (36%) had the wrong GTIN in ERP for the Outer unit; 354 Materials (39%) had missing/wrong GTIN in ERP for the Inner unit; 46 Materials (5%) physically have intermediate pack levels that were not defined in ERP, and hence are also missing their GTIN & dimensions etc; 8 Materials physically have Inner pack levels that are not defined in ERP, and hence are also missing their GTIN & dimensions etc; Dimensions for almost 100% of Inners and Intermediate units, and a high percentage of Outer units, are missing or wrong in ERP; Weights for almost 100% of all units are missing or wrong in ERP. The contents of some Outer, Intermediate, or Inner units for a few materials were wrong in ERP.

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Importance of Data Integrity at KCA How do you think above results would affect…? • Conveyors in production must scan product to control flow to sorters, palletisers, etc. Accumulate pallet /layer slugs; • Robotic palletisers must stack pallets to pallet pattern; • SSCC Label Printer Applicator (LPA) units must print & apply labels to full pallets, assume full pallet qty; • LPA records drive auto production recording against correct Planned Order; • RollOnRollOff and ASRS systems scan SSCC and assume label is correct. Reject if Ht or Wt inconsistent;

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Importance of Data Integrity at KCA How do you think the above results would affect? • WMS must scan GTINs, Batches of received goods. Form std pallets. Consistent Units of Measure (UOM); • Customers order by GTIN, UOM, full pallets, and layers (Ti-Hi). Price per Unit; • Control by Batch, Shelf life, Use-by date, where relevant; • Pick by GTIN & batch, shelf-life; • Vehicle loading & freight costing is dependent on cube, weight; • Invoice correct product and price;

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One K-C, leading the world in Essentials for a better life


Importance of Data Integrity at KCA In summary, poor data quality was hurting every process in our business, and mostly we didn’t know it! But when you try to automate, accelerate, and synchronise, you expose the other 80% of the iceberg you weren’t seeing before!

To improve, we’ve set up: • Centralisd Data Admin team; • Supported by workflow-enabled procedures built into NPD; • Metrics: • New products with missing key attributes; • Products with inconsistent attributes;

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One K-C, leading the world in Essentials for a better life


How did KCA implement GS1net? KCA decided to develop our own program to extract raw data from our ERP as a CSV file, and utilise the services of a third party, Pacific Commerce, to transform & load the data to GS1net. This was done for the following reasons: – KCA operates in multiple industries, and had multiple requests for populating external product catalogues (not just GS1net). We did not want to develop multiple solutions. – KCA did not have the resources available at the time to do a lot of I.T. development. Pacific Commerce already had the basic capability, and was able to meet our requirements quickly and economically. Additionally, they can readily create subsets of data for meeting the needs of other external catalogues.

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How did KCA implement GS1net? KCA has integrated data capture into our NPD process, via workflow; We have a “Central Catalogue Team” to control some data elements, as well as quality assure the whole process; Additionally, we have recently created tools for “selfauditing” our data prior to sending to Pacific Commerce, and to report KPIs.

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Trends & hot issues in Supply chain Value stream (= process) focus, by customer segment. The voice of the customer must permeate the Supply Chain Achieving real “collaboration” Responding to (wildly) changing demand (as well as working to reduce “selfinflicted” fluctuations) Visibility is vital (if you can turn it into improved decisions & execution) Better planning is great – but flawless execution is king Global sourcing, and how to manage the additional complexity and lead times Get more out of existing IT Managing SKU proliferation vs true innovation, and managing SKU complexity Manage risk (product recalls; flu pandemic; peak oil; fuel cost – alternatives; vendor sustainability) Short term vs long term thinking (sustainability) Talent management

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7. KCA Data Integrity Story  

Presented by Mario Carniato 9/28/2010 One K-C, leading the world in Essentials for a better life 1 Who we are Background: Project DANE Data...

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