Supply Chain Strategy Of Colgate Palmolive Commerce

Table of Content

An organisation strives to be the leader in its industry by following a well-designed scheme that incorporates the company mission, vision, values, ends and aims so that it can achieve its long-run competitory place in the market. One of the critical elements of any concern organisation is its supply concatenation scheme and it needs to be decently aligned with the concern scheme ( Bhardwaj & A ; Mitra, 2010 ) . Any company that does non hold a well-integrated Supply Chain Management ( SCM ) scheme is unable to successfully run into the demands of its mark market.

The SCM scheme ensures that the logistics of the company are planned out in progress so that there is equal supply of natural stuffs, minimal degree of stock list is maintained and the supply concatenation operations ‘ cost is reduced ; all of these steps guarantee that an organisation is able to bring forth an appropriate sum of net income and keep its strong place in the industry ( Cho et al. , 2011 ) . Every scheme in the SCM comprises of the program that the company will implement for accomplishing its end of capturing the mark market and heightening the satisfaction degree of consumers.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

Harmonizing to Sehgal ( 2011 ) , the success of a supply concatenation scheme mandates the acceptance of SCM scheme that is decently aligned with the organisation ‘s concern scheme and ensures that its resources and capablenesss are utilized in extremely effectual mode. The concern scheme of a company is defined as the cardinal component that guides the organisation in doing determinations that are compatible with the demands of its aims so that it can do successful patterned advance and better its profitableness efficaciously. It is believed that SCM scheme is extremely dependent on the concern scheme as it is the footing on which most of the companies want to vie in the market and derive competitory border for long period ( Elgazaar et al. , 2012 ) .

For case, if a company is offering customized merchandises like Dell, so it will hold to guarantee that it has an efficient and co-ordinated SCM scheme which will help it in carry throughing the demands of the clients absolutely and on clip. If Dell faces deficit of cardinal parts or monetary values of its natural stuffs rise significantly, so it will be unable to offer the merchandises at sensible monetary values. However, the success of Dell is mostly dependent on the development of an effectual SCM scheme that is compatible with its concern aim of offering customized merchandises to the consumers at inexpensive rates with the fastest bringing procedure ( Green, Whitten & A ; Inman, 2011 ) .

As the natural stuff issues are being faced by the companies worldwide, it has become of import for every organisation to come in into contractual understandings with the providers so that it can minimise its hazard of confronting any natural stuff deficit in its concern term of office ( ) . With the aid of variable cost understanding, both the purchaser and marketer will hold a win-win state of affairs ; each party will acquire exposure to the advantages of alterations in the monetary value. The marketer is protected from the addition in monetary value that could hold eroded the borders and the purchaser can avail the low priced merchandise if the monetary value of trade good diminutions during the period of a contract ( Business for Social Responsibility, 2008 ) .

Hence, an SCM scheme should be developed in conformity with the organisation ‘s vision, mission and ends so that it is compatible with its concern scheme and supply support to the company for carry throughing its promise of presenting the merchandises and services within in agreement clip period ( Elmeziane, Chuanmin, & A ; Elmeziane, 2011 ) . It is critical for every house to recognize that if the supply concatenation scheme lacks alliance with the concern scheme so there are immense opportunities that its concern operations get badly impacted ; in some utmost instances, the companies have undergone bankruptcy every bit good.

Introduction of Colgate-Palmolive

Colgate-Palmolive is among the taking Multinational Corporations that has been give top ranking in the consumer merchandises class. It has its central offices in New York and it is believed to hold an plus of $ 94 billion that comprises of all its merchandises that it is selling in more than two 100 states. Colgate-Palmolive is involved in the concern of fabrication and merchandising of assorted consumer merchandises that comprise of cleansing merchandises, soaps, toothpastes and favored supplies ; it has loosely classified its merchandises into two classs i.e. Oral, Personal and Home Care and Pet Nutrition ( “ Supply Chain Management ” , 2012 ) .

Since the company has its operations in assorted parts across the Earth, it is of huge importance to hold a well-integrated system that will assist in efficient and speedy exchange of valuable informations and information. Initially, Colgate-Palmolive had a decentralized construction that was making many issues in its concern operations particularly in Supply Chain Management ( SCM ) . In November 1999, the direction squad of the company decided to revamp its IT substructure by implementing a alone and advanced system that ensured integrating of every map throughout the organisation across all its operational activities on international degree ( Bolstroff, & A ; Rosenbaum, 2011 ) .

The planetary SCM system of Colgate-Palmolive has been replaced with SAP R/3 solution so that it can capitalise on its resources along with sweetening of the planetary SCM direction so that the retail merchants, clients and direction were provided service of superior quality, stock list cost was controlled to a great extent and gross watercourse started to increase at a good gait ( Blanchard, 2010 ) .

Colgate-Palmolive vision and nucleus values

The vision statement of Colgate-Palmolive is “ To offer merchandises on the footing of three nucleus values i.e. planetary teamwork, caring attitude and betterment on uninterrupted footing ” . The nucleus values of the company are as follows:

To offer growing chances to the company ‘s employees both on professional and personal degrees.

To carry through all Corporate Social Responsibilities as a cardinal member of the community on planetary degree.

To heighten the value of stockholders.

To develop procedures and policies that will guarantee that the company is able to beef up its place in the market and several industry.

To research all latest enterprises and chances that are bing in the market.

Supply Chain Structure of Colgate-Palmolive

In order to work out the chief issue of Colgate-Palmolive, Colgate ‘s planetary supply concatenation system was developed ; the three cardinal supply concatenation schemes that formed the footing of this system. The first 1 was the debut of the Vendor Inventory Control ( VMI ) merchandise so that there was a diminution in the stock list channel and timing of the rhythm every bit good. The 2nd scheme was the execution of a resource planning system at cross-border degree so that regional theoretical accounts were developed for the international forms ; it ensured that the company had equal pool of assets so that there was a balance with the company ‘s concern scheme.

The last and concluding scheme was execution of a collaborative plan that ensured there was a well-balanced downstream concern system for effectual direction of the market demand of supply concatenation along with effectual coordination of the system ‘s activities. With the aid of new system, everyone in the organisation is well-aware of the supply concatenation statistics ; the IT system has enhanced the company ‘s SCM system which has helped in using the supply concatenation information with truth so that the consumers ever had easy entree to the merchandises and the deficit jobs was reduced by 50 % in the first three months of the SAP R/3 execution.

Global Resource Utilization in Colgate-Palmolive

When new and advanced systems were installed in the company that comprised of SAP R/3 ERP package along with Oracle related DBMS ( Database Management System ) and Solaris Operating System developed by the Sun hardware platform, the company was able to take advantage of a well-integrated system. Colgate-Palmolive was able to incorporate with its cross-regional resource usage systems ( CBS ) demand and resource information about the international demand efficaciously. Since the input was rapid, there was an addition in the figure of cargos, decrease in the figure of improper or uncomplete orders and a important diminution in the figure of stock list.

With the aid of the latest SCM system, the providers had developed direct links with the company ‘s production unit and they were responsible for effectual direction of resources at the distribution centres for supplementing Colgate-Palmolive concern operations. This new system is based on the order flow of the clients and driven by the distribution centres of Colgate around the Earth as the providers are now straight providing the merchandises.

The concern control processs in CBS are supported by SCM system of SAP that is to a great extent dependent on the signals of day-to-day demand along with the replenishment orders of stock list which are determined by the computation. With the aid of this system, the supply and demand degree is maintained at a consistent degree that helps the company in being more antiphonal to the fulfilment of particular orders. It has been observed by the company that there is a important decrease in the prognosis inaccuracy, merchandise stock list degree is reduced, addition in the figure of orders fulfillment, decrease in rhythm clip and the completed orders rate is further enhanced.

The SCM scheme has three chief elements for real-time integrating theoretical account i.e. SAP support system for stock, orders and other indices of market, existent information about the client order demands and effectual integrating of ERP, SCM and CRM systems. The company is taking that the SCM scheme is efficaciously implemented in all its houses across the Earth ; VMI, collaborative engine and CBS are applied to all shopping promenades and trade names so that effectivity of SCM can be managed efficaciously.

As the supply concatenation information is more seeable, there are high opportunities that the company has entree to seasonably, consistent and accurate informations that will guarantee that the planning determinations are made expeditiously so that the company is able to accomplish its ends successfully. In order to guarantee that there is an effectual decision-making procedure throughout the endeavor, Business Intelligence System will let Colgate-Palmolive to hold speedy entree to precise and consistent informations.

With the aid of SCM system, the company will be able to heighten its market fight along with beef uping its place in the planetary concern development, deriving competitory border in the monetary value war and marketing its merchandises in a strategic manner. In order to heighten its concern operations, Colgate has integrated its e-enterprise by developing affable and closer dealingss with its spouses and clients.


For every organisation, it is of import to hold a well-integrated SCM system that will guarantee that its supply concatenation scheme is complementing the concern scheme. With the aid of an effectual SCM system, Colgate and its consumers and spouses can hold quicker and on-time orders, production planning and stock list direction is effectual done, order fulfilment rate additions at a higher degree, prediction is expeditiously completed and public presentation of the company can be easy monitored.

Hence, Colgate-Palmolive has wholly revamped its SCM construction so that it can keep its image as a planetary leader in the consumer merchandises market by carry throughing all orders on clip and commanding the costs that will assist it to do investing in other options for farther enlargement determinations. Therefore, an effectual SCM system is one that is aligned with the concern scheme which will guarantee that the company is able to accomplish its aims efficaciously, fruitfully and profitableness.

Cite this page

Supply Chain Strategy Of Colgate Palmolive Commerce. (2017, Jul 12). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront