Gillette Sharpens Collaborations

Dec. 21, 2004
ERP system linked to suppliers, customers.

Few things can frighten executives more than the idea of another company viewing their data. However, in today's rapidly emerging world of e-business, some manufacturers have recognized that opening up an ERP system isn't just a good idea, it's a competitive advantage. At Boston-based Gillette Co., which sells products such as razors and blades, batteries, and dental care products in 200 countries, the idea is to remain a cut above the competition by extending its ERP system to suppliers and customers. "Today, as business relationships expand and change, it is important to leverage information to its maximum advantage," explains James McLaughlin, director of process and systems for supply-chain management. "Collaborating with suppliers and customers can improve ROI." Gillette, which tallied sales of about $9.3 billion last year, uses a variety of enterprise software, including SAP's R/3 and Advanced Planning and Optimization systems, QAD for its grooming-product manufacturing plants, and Manugistics for demand and supply planning. It links the systems to forecasting, analytical, manufacturing, and scheduling data from business partners. Armed with merchant data, for example, it can gauge sales across product lines and geographic regions. That, combined with internal data, allows it to tweak promotions and determine whether the phaseout of older products and the launch of new ones is being executed at the right time. And that's just for starters. McLaughlin can keep a close eye on manufacturing and know whether production is on track or falling behind schedule. By sharing master production data internally, the company can adjust on the fly, replenish supplies more quickly, and reduce inventory levels. Essentially, McLaughlin says, the system creates a more dynamic way for a supply chain to interact. Gillette uses a private exchange to bring together its suppliers and customers. That allows purchasing managers, for example, to view forecasts and actual orders and know whether the company is on target. At that point, it is possible to look at how various promotional plans, packaging changes, or delivery methods might boost sales. The system also lets retailers check on the status of their orders and know where a shipment is at any point in the process. The goal, says McLaughlin, is total integration of the IT system worldwide. Now five years old, Gillette's initiative is about 80% complete. "When you have ERP data residing in one place and you have consistent definitions for how to use it," McLaughlin concludes, "it is possible to leverage the technology and resources more effectively across your supply chain."

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