Colgate-Palmolive launches up to $300M supply chain revamp

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Dive brief:

• CFO Stanley Sutula told investors in revenue on August 1: “Colgate-Palmolive plans to optimize its global supply chain as part of the three-year program, $ 200 million to $ 300 million.”
• The initiative also includes reconstruction of parts of the organizational framework of the personal and home care company and simplification operations to reduce overhead and increase performance, according to the company’s Q2 income statement.
• “We do not want to go here in detail, but as we said, this is a combination of our supply chain optimization and then in the areas we think we can optimize where we devote our resources,” Sotula said.

Dive insight:

Colgate-Palmolive, like many manufacturers, increases its supply chain as a source for higher productivity, lower costs and operational efficiency. In June, Procter & Gamble unveiled plans to reorganize its network as part of a two -year reconstruction project.

The latest Colgate-Palmolive productivity program less than 12 months after completing a two-year initiative that includes the simplification of the company’s supply chain to reduce structural costs, is the company’s latest annual report.

However, the lean supply chain is subsequently faced with different macroeconomic conditions until Colgate-Palmolive made an effort at the end of 2024.

“Colgate-Palmolive collides with unstable costs and increased costs due to increased tariffs, more costs and packaging and low-class inflation, which provides lower prices for increased retail prices in response to increased costs in other sectors of trade,” said Noel Wallace CEO.

The Colgate-Palmolive supply chain was also forced to respond quickly to call for changes caused by consumer uncertainty, Wallace said. This includes regulating consumer preferences when moving between a few more expensive packages and cheaper unit packages or smaller sizes.

“We can use our global supply chain breadth, resilience and agility to respond to these changes in consumer preference,” Wallace said.

In publishing its Q2 revenue, Colgate-Palmolive reduced its predicted 2025 tariff costs to $ 75 million from $ 200 million in contact with its Q1 revenue. The last estimate is based on the announced and final tariffs since July 31, in any provision of income.