- Colgate-Palmolive is using sensors and robotics to speed up quality checks while reducing human intervention.
- These tools enable the company to optimize production in its 49 factories.
- This article is part of the “Future of Supply Chain Management” series on corporate manufacturing and distribution strategies.
Colgate-Palmolive produces over 15,000 bottles of toothpaste every minute.
To ensure the production line was running properly, employees would perform quality checks every 30 minutes, ensuring that tubes of Colgate toothpaste were properly positioned, their seals were tight, the artwork was printed properly, and the box casing matched the tube.
But investments in new technology, sensors and other digital tools now allow the company to conduct continuous quality checks. Similarly, the consumer goods giant is rolling out analytical testing of Hill's pet foods, using robotics to ensure the quality of the food matches the desired formula.
With less human intervention, “people can really focus on running the line,” Luciano Sieber, chief supply chain officer at Colgate-Palmolive, told Business Insider.
How COVID has changed the supply chain of a major consumer goods company
Colgate-Palmolive produces Irish Spring soap, Speed Stick deodorant and Ajax cleaning products in 49 factories and stores the products in approximately 200 warehouses around the world. Colgate-branded products are found in approximately 60 percent of homes around the world.
Like other major consumer goods companies, Colgate-Palmolive's supply chain is built around a fairly stable business model: Tons of goods are made in factories, then shipped to warehouses for distribution to major retailers.
But supply chains have become more complicated as consumer shopping patterns have changed. COVID-19 has caused a surge in demand for e-commerce stores selling household goods, including those that are still available in brick-and-mortar stores. Food and personal care products have seen the largest revenue increases due to the shift to online channels, according to the Department of Commerce's International Trade Administration.
This shift in spending is likely to continue even after the pandemic subsides, putting intense pressure on consumer brands to make their supply chains as efficient as possible. CPG brands aren't just shipping to big customers like Walmart and Target. Food and household goods are now being delivered to consumers from many more locations.
Automation and AI enable manufacturing efficiency
Colgate-Palmolive Co. said automating its manufacturing lines helps smooth out variations due to location.
In Europe, product formulations can vary from region to region, factories have hundreds of packaging and formulation combinations, and Colgate has thousands of vendor partners for its toothpastes, tubes and containers.
Using artificial intelligence, the factory can use algorithms to optimize production plans for the various toothpastes the company produces.
“This not only supports our growth, but also allows us to optimize our existing assets, minimizing the capital expenditures needed to add capacity,” Seeber said.
Emma Rolfe, senior vice president of global supply, demand and e-commerce at Colgate-Palmolive, said AI can help the company respond more effectively to changes in workflow when new formulas are added or when increased regional demand changes capacity requirements.
“Today, this is a task that takes hours and produces different answers depending on who answers,” Rolf says. “AI can help in a more standardized way.”
New AI tool helps track goods
Colgate-Palmolive is piloting digital AI tools, including tracking technology, that can provide retailers with automated updates on product orders, including any delays that may occur during delivery.
Salespeople can use their mobile phones to scan store shelves and use AI to look for stock shortages and determine which products need to be restocked to meet the demand of that store's customer base.
Last year, the company opened a new Hill's pet food plant in Kansas. The 365,000-square-foot facility is Colgate-Palmolive's first “smart” plant, leveraging AI and automation to reduce labor. This has allowed the company to shorten production cycles, create flexibility to develop new pet food products, and reduce energy and water usage compared to other plants, according to a company press release.
“Everything, including quality testing, has been automated, making the factory much more efficient,” Seeber said.
As is often the case with AI and automation, new factories like the one in Kansas raise questions about the impact they will have on jobs, but Seeber emphasizes that humans will always be involved in manufacturing.
“Technology is what you see in our most advanced facilities, but it's not the whole story,” Seeber said. Upskilling Colgate-Palmolive's workforce will move employees “from manual tasks to really using the power of critical thinking and conceptual thinking to improve process performance,” Seeber said.
