Henkel Ibérica 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

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 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 3
 Strategy Debate
SKU Proliferation

Pros Cons
 Competing directly with  Increases complexity
competitors  Costs amplified:
 Potential for high revenue with ○ sourcing
high variety ○ production
○ inventory
○ distribution
 Complicates forecasting
 Increases the propensity to stock
out
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 Strategy Debate
Simplify & Adopt EDLP

Pros Cons
 Increased forecast accuracy  Risk of reduced market share
○ Refocused on main  Possible negative impact on
products revenue
 Reduced costs:
○ Manufacturing
○ Transportation
○ Inventory
 EDLP may diversify competition
 Consumer loyalty

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 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 6
Benefits & Risks of CPFR
Benefits to Henkel
 Revised forecasts
 Smoother ordering patterns
 Higher order fill rates and
improved customer SL’s
 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

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 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/single-
article-page/article/european-grocery-supplier-shows-how-cpfr-really-works/ 8
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

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Thank you! Questions?

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