kimberly-corp

How Kimberly-Clark Keeps Client Costco in Diapers One morning, a Costco store in Los Angeles began running a little low on size-one and size-two Huggies. Crisis loomed. So what did Costco managers do? Nothing; They didn't have to, thanks to a special arrangement with Kimberly-Clark Corp., the company that makes the diapers. Under this deal, responsibility for replenishing stock falls on the manufacturer, not Costco. In return, the big retailer shares detailed information about individual stores' sales. So, long before babies in Los Angeles would ever notice it, diaper dearth was averted by a Kimberly-Clark data analyst working at a computer hundreds of miles away in Neenah, Wis. "When they were doing their own ordering, they didn't have as good a grasp" of inventory, says the Kimberly-Clark data analyst, Michael Fafnis. Now, a special computer link with Costco allows Mr. Fafnis to make snap decisions about where to ship more Huggies and other Kimberly-Clark products. Just a few years ago, the sharing of such data between a major retailer and a key supplier would have been unthinkable. But the arrangement between Costco Wholesale Corp. and Kimberly-Clark underscores a sweeping change in American retailing. Across the country, powerful retailers from Wal-Mart Stores Inc. to Target Corp. to J.C. Penney Co. are pressuring their suppliers to take a more active role in shepherding products from the factory to store shelves. CHANGING SIZES In some cases, that means requiring suppliers to shoulder the costs of warehousing excess merchandise. In others, it means pushing suppliers to change product or package sizes. In the case of Costco and Kimberly Clark, whose coordinated plan is officially called "vendor-managed inventory," Kimberly-Clark oversees and pays for everything involved with managing Costco's inventory except the actual shelf-stockers in store aisles. Whatever the arrangement and the terminology, the major focus for