Optimizing Supply Chain Resilience and Efficiency through AI

Optimizing Supply Chain Resilience and Efficiency through AI is the main topic of the article “Kimberly-Clark’s Supply Chain Reset: Applying Pandemic Learnings and AI for Improvement” (April 1, 2023) by Bob Trebilcock for Supply Chain Management Review.

Challenges and Normalization

The challenges supply chains faced during and after the pandemic have been extensively discussed, but the recovery and normalization phase needs to be more emphasized. In this context, Kimberly-Clark, a consumer packaged goods (CPG) giant, is not just bouncing back; it’s experiencing what Scott DeGroot, Vice President of Global Logistics, calls a “reset moment.”

Consumer Demand Normalization

Kimberly-Clark, renowned for producing household staples like Cottonelle and Kleenex, found itself caught amid unpredictable consumer demand spikes when the economy shut down. However, the present scenario is notably different. Scott DeGroot notes that consumer behavior has aligned with standard demand patterns. While acknowledging that physical constraints may still pose occasional challenges, the company has primarily normalized the flow of goods.

EARL – Tackling Order Bunching

This normalization sets the stage for Kimberly-Clark to proactively assess its supply chain processes. One significant initiative is implementing a new logistics tool named Early AM Release and Leveling (EARL). This tool, developed in collaboration with ProvisionAi, addresses the issue of “order bunching,” a phenomenon where unexpected spikes in shipments from manufacturing plants to distribution centers disrupt transportation planning.

EARL’s Functions and Implementation

EARL introduces a multifaceted approach. Its LevelLoad function analyzes shipment volume and lane capacity, determining the necessary number of trucks each day. Simultaneously, it submits a placeholder stock transfer order to secure early tendering, reserving required carrier capacity. EARL pulls data from Kimberly-Clark’s central transportation management system, warehouse management system, and supply chain planning system.

The tool’s analysis, which takes place daily, informs the planning and transportation management systems. By comparing orders against committed capacity, stock availability, and windows before and after the original shipment date, EARL recommends redistributing shipments without affecting service.

Efficiency and Savings from Optimizing Supply Chain 

The implementation of EARL was a meticulous 10-month project, from design to full deployment across the North American network. Currently applied to approximately 80% of shipments to Kimberly-Clark facilities, EARL boasts a 60% acceptance rate for its recommendations. The impact has been substantial, leading to savings of several million dollars annually in North American freight costs.

Optimizing Supply Chain Applications and Recognition 

Kimberly-Clark is considering expanding EARL’s application to inbound shipments or manufacturing processes. The success of EARL has not only brought efficiency and cost improvements to one of Kimberly-Clark’s major supply chain expenses. Still, it has also instilled confidence within the supply chain team in integrating artificial intelligence tools. Scott DeGroot emphasizes that AI in supply chain management is not a future aspiration but a present reality.

This impressive integration of EARL earned Kimberly-Clark recognition as a finalist in the 2022 Council of Supply Chain Management Professionals-sponsored Supply Chain Innovator of the Year Award competition. This award acknowledges companies demonstrating innovative solutions and transformative results in supply chain management.