Kimberly-Clark Using RFID Analytics Service to Trim Out-of-Stocks

By Claire Swedberg

May 4, 2007—Kimberly-Clark (K-C) has begun using TrueDemand's RFID-powered inventory-forecasting service, with a goal of reducing out-of-stocks of merchandise on store shelves. K-C markets health and hygiene products under such brands as Kleenex, Huggies, Scott and Cottonelle. The company began piloting TrueDemand's Forecast and Replenishment Manager (FRM) in 2006, says Larry Roth, a senior supply chain consultant at K-C, and quickly discovered that out-of-stocks on store shelves were twice as great as the firm had previously believed'.

The system has been newly deployed for 500 stores. By the end of this year, Roth says, the company hopes to implement the system at all of the approximately 4,000 U.S. retail stores to which the company provides products, whether those stores are RFID-enabled or not. K-C's intention, Roth says, is to have the capability to use the system in every store, as soon as each store installs RFID interrogators.

Kimberly-Clark's Larry Roth

K-C has already been using OATSystems' software to track promotional product displays set up in retail stores (see OATSystems Launches Solutions for Tracking In-Store Product Promotions). However, it has now added TrueDemand's FRM system to manage the stocking of items on store shelves.

"Our business case is driving additional retail sales by eliminating out-of-stocks," says Roth. "TrueDemand gives us a deep understanding of the supply chain for regular product that goes on the shelf."

Kimberly-Clark chose the FRM system to better analyze RFID data coming from Wal-Mart, one of its major customers. The system allows K-C's analysts to narrow data regarding thousands of store items to about five priorities that need to be resolved. It then provides suggestions for addressing those priorities.

In the past, Roth states, suppliers may have discovered an empty shelf by simply walking through the store, then ordered more of that product. "Depending on the problem, that could be exactly the wrong thing to do," he says. For example, if a product is not making it to the floor because of an excess volume of that item in the back room—making it difficult for store staff to determine where specific products belong on the shelf—then ordering more could exacerbate the situation. With the FRM system, those kinds of mistakes won't happen, asserts Eric Peters, TrueDemand's CEO.