1. Imagine a Supply Chain
That Can Maximize
Profitability
September 2014

2. Who is Colgate-Palmolive
Started in 1806 in U.S.
$17+ Billion Global Sales
35,000 Colgate people worldwide
Operations in over 80 countries
Selling products in 225 countries
Four core categories:
Oral Care Personal Care
Pet Nutrition Home Care
Colgate Palmolive Company

3. Truly a Global Company
18%
21%
20%
13%
28%
Hill’s
Pet Nutrition
Europe/
South Pacific
Greater
Asia/Africa
North America
Latin America

4. 2013 Key Results
Organic Growth + 6.5%
Gross Profit Margin + 50 bp to 58.8%
Return on Capital > 30%
Colgate’s Global Supply Chain major
company leader and contributor to results

5. Colgate Global Supply
Colgate Palmolive Company
Chain Video

6. “Designing For Profitability”
in an era of Complexity and Volatility
A Decade of SKU / Item proliferation
– Product lifecycles shortening
– Customer differentiation demands
– Competitive pressures
– Increasing Promotions
Colgate Palmolive Company

7. Colgate Palmolive Company
Supply Chain
Challenge For
Profitability
and …
TOTAL NUMBER OF SKUS
% OF TOTAL
REVENUE
The Supply Challenge
20% of SKUs = 80% of Revenue
“80 – 20 Rule”

8. Colgate Palmolive Company
How does the supply chain
help ensure that the challenge
does not become larger?
TOTAL NUMBER OF SKUS
% OF TOTAL
REVENUE
The Supply Challenge
20% of SKUs = 80% of Revenue
“80 – 20 Rule”

9. E2E Supply Chain Mindset
New processes and tools
Cross functional exercises with
Marketing and Technology
Guides to evaluate E2E impacts
of new products
Constraints and opportunities
evaluated
“What-if” scenarios developed
Goal to “manage complexity”

10. Supply Chain working with our
Commercial Partners
17
Plant Meeting with regional
commercial partners
demonstrating and finding
solutions to SKU proliferation

11. Compounded Impact of
Complexity on Manufacturing
Area of complexity
driven by innovation
and competition
Capacity erosion
Highest cost
Lowest flexibility
Area of complexity
driven by innovation
and competition
# of formulas
# of Packaging
Configurations
19

12. Mastering Manufacturing Complexity
Cycle
Time
Reduction
Increased
Post
Addition
Usage
Capacity
Losses
Energy
21

13. Post Addition Example
Toothpaste making
– Batch process – mixer constraint
– Formula proliferation in last decade
Post addition technology
– 15 year in house development
– after mixer allows addition of color, flavor
and even actives
Colgate Palmolive Company

14. Results For One Category
• +20,896 Tons in
2013
• +1,505 Tons in
2014
• +8,350 Tons
(already
implemented)
• +11,062 Tons as
phase II
Capacity Gain
+21K Tons
2013 Results
Capacity Gain
+19K Tons
Capacity Gain
+30K Tons
Material Loss
Reductions
$100K
Capacity Gain
+14K Tons
Material Loss
Reductions
$140K
Water Saved
29K tons

15. Global, Local Key Bundles Complexity
3 Billion Toothbrushes
One site 600+ SKUs

16. Material Simplification
10 Color 151 M# 4 suppliers 398 ton/year
Blue:35
Green:31
Red:25
Purple:24
Yellow:14
Orange:12
Gray:4
White:3
Black:2
Transparent:1
30
11
27
9
21
8
21
11 11 10
3 2
35
30
25
20
15
10
5
0
Before After
# of Colorants at CSX
Colorant
24

17. Global Complexity Management
3 Year Peak Reductions
No. of
Formulas
No. of
Backbones
No. of
Fragrances

18. Global SKU Count Trend
Colgate SKU count is down in two years
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2013

19. Sales / SKUs
“Profitability”
‘12YTD vs
‘11YTD
‘13YTD vs
‘12YTD
Total
Company

20. Designing for Profitability
Colgate Palmolive Company
Take-Aways
Commercial partnerships essential
End-to-End supply chain process
SKU/Item management leadership critical

21. Driving Profitability
Colgate Palmolive Company

22. Cultural Mindset
Colgate Palmolive Company

23. Funding the Growth
Colgate Palmolive Company

24. FTG Program Definition
The systematic identification and
progress tracking of our global savings
initiatives across every line in the P&L
that fund our growth and help deliver our
profit and EPS goals
Colgate Palmolive Company

25. FTG Program Elements
 Standard global process
 Includes all functions and spend categories
 Function, Division and Subsidiary Leaders
own their local programs
 Results are tied to Performance Objectives
 Rewards & Recognition programs in place
Colgate Palmolive Company

26. On average,
3-4% to Sales
delivered
every year since 2002
Colgate Palmolive Company

27. Keys to Success
Strong Leadership Ownership &
Commitment
Consistent Approach
Focus and Discipline
Visibility and Communication
Colgate Palmolive Company

28. Driving Profitability
Colgate Palmolive Company
Cultural
From Design to Execution