Henkel Ibrica Case

Study
CASE-A-DILLAS
Caleigh Feeny, Rita Gates, Lia Chen, Alex Fownes

Competitive Environment
Law of Commerce
Growth of private label
products
Industry structure
P&G, Unilever, RB,
Henkel
Market share
Reactive selling
techniques
Problems plagued the entire
industry
2

Principal Issues
Creation of various promotions
Product and packaging
proliferation
Added complexity in supply
chain
Inaccurate long-term forecasts
Negatively-impacted production
costs

http://regalosymuestrasgratis.com/sorteo-de-licor-del-polo-en-internet.html

Strategy Debate
SKU Proliferation
Pros
Competing directly with
competitors
Potential for high revenue with
high variety

Cons
Increases complexity
Costs amplified:
sourcing
production
inventory
distribution
Complicates forecasting
Increases the propensity to stock
out
4

Strategy Debate
Simplify & Adopt EDLP
Pros
Increased forecast accuracy
Refocused on main
products
Reduced costs:
Manufacturing
Transportation
Inventory
EDLP may diversify competition
Consumer loyalty

Cons
Risk of reduced market share
Possible negative impact on
revenue

CPFR Integration
Collaborative Planning,
Forecasting, and Replenishment
o B2B collaboration
Joint visibility and
information sharing
Process to create more
efficient forecasts
o Nine-step process

http://www.businessweek.com/adsections/chain/2.1/momentum.html

Benefits & Risks of CPFR

Benefits to Henkel
Revised forecasts
Smoother ordering patterns
Higher order fill rates and
improved customer SLs
Reduced production costs
Better-maintained relationships
Increased collaboration
Industry fits CPFR criteria
Full pallets and full trucks

Risks to Henkel
Complicated implementation
o Different information
sharing systems
o Costly and time
intensive
Added vulnerability
Organizational change

CPFR Key Characteristics

Does Henkel Possess:
Collaborative processes?
Collaborative cultures?
Collaborative relationships?
European Grocery Supplier Shows How CPRF Really
Works
http://www.supplychainbrain.com/content/technology-solutions/forecasting-demand-planning/singlearticle-page/article/european-grocery-supplier-shows-how-cpfr-really-works/

Recommendations
Focus on a simplified, EDLP strategy
Learnings from the Motorola Case
o A phased approach works best
o Collaboration is focused on building relationships
Postponement and Modular Design
o 10% of raw materials

Thank you! Questions?

10