Next Steps for Clorox

By Larry Dignan  |  Posted 2003-08-08 Print this article Print

The consumer-products giant is in the middle of an SAP implementation it hopes will help save $250 million annually.

According to Clorox, it has completed the first phase of its technology plan, which included SAP and Siebel rollouts for such activities as taking customer orders, managing accounts receivable and providing customer service.

That phase was completed Dec. 1 and is currently in "stabilization" mode, a phase where Clorox employees are learning to use the new system.

Much of the Siebel rollout is focused on improving marketing and tracking of Clorox products on store shelves. Dwight Moore, Siebel's product-marketing manager, says Clorox largely had a paper-based and Microsoft Excel system of exchanging information with its customers. It was common to find a different spreadsheet with each product manager, says Moore. Clorox couldn't match the amount of product shipped with actual sales data.

The next leg, set to be completed this time next year, includes installing SAP in its manufacturing operations, says Clorox investor relations head Steve Austenfeld. When SAP is installed, Clorox hopes to link marketing promotions with its plant production, adjusting to demand on the fly.

Following that phase, SAP modules for human resources, supply-chain planning and financials for internal operations will be installed. Austenfeld says Clorox can't determine what part of the $250 million in savings will be directly attributed to the SAP and Siebel installations. The line between cost-cutting moves such as paring product lines and technology efficiency is fuzzy, says Austenfeld.

Franklin Morton, a portfolio manager for Ariel Capital Management, which owns 3.1 million Clorox shares, expects the company to meet its cost-cutting goals. "The management went through cost cutting almost every other year in the 1990s," says Morton. "If they promised $25 million in savings you'd get $50 million."

Next page: What you should do to ensure your SAP installation.

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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