Henkel’s Path to a New Generation VMI

• VMI analyst productivity/ capacity significantly increased Long-term partnership
• Much more information now available for decision-making; Henkel knows scorecard metrics even before the customer
• All existing VMI partners transitioned in just 6 months; program now expanding

Henkel is the name behind some of America’s favourite brands. From Dial® soaps to Purex® laundry detergents, Right Guard® antiperspirants, got2b® hair styling products, and Loctite® adhesives, Henkel brands are part of your daily life. Founded in 1876, Henkel operates worldwide with leading brands and technologies in three business areas: Laundry & Home Care, Beauty Care and Adhesive Technologies. Henkel employs about 47,000 people globally, and reported sales of $21.8 billion and adjusted operating profit of $3.3 billion in fiscal 2013. With respect to supply chain, Henkel Consumer Goods Inc. manages five regional DCs, 3,500+ SKUs and 2,000+ customer delivery points across the U.S. and Canada.

As customer demand for VMI continued to increase, Henkel recognized that their VMI program could not scale to the level they needed without a change in approach. Abu explains, “We did not have a fully integrated VMI system in place. The process was managed using manual data manipulation and Excel spreadsheets. That approach was very inefficient and non-standardized, which prevented us from applying more advanced VMI practices.”

In early 2012, Henkel Consumer Goods Inc. North America established a clear goal for their VMI program: find and implement a solution that would enable optimizing the VMI process for existing VMI accounts and enable expansion of the VMI program to additional customers in a cost-effective, confident manner.

Based on the extensive evaluation, the choice to implement TrueCommerce in North America was confirmed. Abu summarises, “When we considered all of the functional, technical and service aspects of what we wanted in a new generation VMI platform, TrueCommerce was the simple choice. They were a clear leader in VMI with 80+ current VMI customers and were already handling a number of very large CPG customers, processing millions of SKUs and managing thousands of locations around the world.”

“There were several other factors that were just as important to us, though,” adds Abu. “The Software as a Service (SaaS) model meant we would not need a lengthy software installation process or any significant on-going internal IT support services. The TrueCommerce Customer Care group offered a much broader range of support services than we typically see from a solution provider. And the fact that TrueCommerce had a history of delivering three new releases every year indicated that we would continue to gain access to new innovations in the VMI process that would keep us on the leading edge over time. Those were all very important aspects of deciding our VMI partner.”

Henkel initiated the move to TrueCommerce with a project kick-off in March 2013 and completed the transition in September 2013, just six months later.

“The TrueCommerce Customer Care team acted as an extension to the Henkel team throughout the transition,” says Abu. “We know that had a lot to do with having the process run as smoothly as it did.”

The Henkel team has seen significant benefits from the move to TrueCommerce. “Our VMI analyst productivity has increased on many fronts,” says Abu. “Dozens of daily processes that had required manual work are now automated. We also eliminated the need for Henkel IT to interpret retailer product activity and perform error-related reporting – now performed by TrueCommerce. We have much better tools for handling challenging activities like promotions and product changes.”

Henkel has maintained or improved customer inventory metrics across the board since the move to TrueCommerce. “We have greatly improved reporting capabilities,” says Abu. “For instance, we’re now carrying out executive summaries using data from TrueCommerce. With that information, we now know how we’re performing before the customer does.

That’s a significant step forward and enables us to collaborate more effectively with our VMI customers when holding periodic scorecard review meetings.”