We spoke with Mike Corbo, former Chief Supply Chain Officer of Colgate-Palmolive, to gain his insights on ensuring supply chain resilience through decades of disruption, and the implications of new regulations and technology for the future of the global supply chain.
After over 40 years of leadership experience in supply chain and procurement at Colgate-Palmolive, Mike Corbo now serves as a board member for WK Kellogg Co and Vetnique, and serves as an advisor for Regrello, Harry’s, Kinaxis, and Craft.co.
At Colgate-Palmolive, Mike managed complex global supply chain operations and drove innovation, most recently ensuring resilience and success during the global pandemic. Mike is passionate about learning, problem-solving, and sharing his expertise, so we are very grateful to have him on our Supply Chain Advisory Board, and share his valuable knowledge with you.
Regional Supply Chains Evolve into Global Supply Networks via Modernization and Automation
Q: You’ve set quite an example of internal mobility at Colgate-Palmolive, holding many positions over your 40-year tenure. How did Colgate-Palmolive and your role evolve during your time there? What initiatives are you most proud of?
Mike: It’s really interesting that you brought that up! I was counting it the other day. I held about 18 different roles in 40 years, but the last 10 were within 1 position. So, the majority of those positions occurred in the first 30 years.
When I started, every location had its own supply chain. So, if you were in Italy, you had an Italian plant, storehouse, supply chain, and sometimes, your own R&D. Colgate-Palmolive was a big, global company operating around the world, but every location was kind of doing their own thing. It evolved fairly quickly to a regional structure, where you started to look at sharing and sourcing distribution channels. That quickly progressed to large region sourcing where you considered the landed cost of the product to understand if you can take it to market successfully and sell it for a profit.
Even with all that progress over the years, over 60% of the products were still produced in the country where they were sold. We used big sites that had reach and were able to move product. It was a challenge. Initially, we got a lot of pushback because people like to control and own.
You start finding that the world has more similarities than differences, especially when it comes to product, usability, and even taste. That’s what we used as leverage to build a global supply network.
Q: When was the regionality theme occurring?
Mike: Regionality happened pretty heavily in the 90’s; from early 90’s through mid 2004/5. We looked at Latin America, and noticed every country had its own plant and supply chain. So, we built larger sites that reached across other countries in Latin America. We did a similar thing in Europe. Even the US probably had more capabilities than it needed in terms of manufacturing.
There’s also the theme of modernizing. Colgate started in 1806, so you’re talking about a very old company. Some of their subsidiaries have been around for 75 to 90 years. Part of my whole journey there was automating and modernizing facilities.
It was a great experience. You look back and think about all of the people who you’ve interacted with. I’m very happy that Craft is working with Elvire and that she was your first expert perspective because she was someone I remember that worked at Colgate that did a really good job. She was a very good change agent. I like to change things, not for the sake of change, but when change is required, I’m not a big status quo guy. I get bored very easily.
What you’re looking at here with Craft is implementing change and getting people comfortable with change.
You should consider that anything you do now will probably be stale in 18 months, and you should be thinking about ways you can upgrade or change again to stay current.
When I started, you’d have maybe a decade before it got stale. No more. Things are moving very quickly.
Q: It seems like things that happened yesterday are already old news. We’ve noticed there is also a common theme in procurement and supply chain roles where there’s an education factor. When you were globalizing Colgate, you needed to educate stakeholders on digital transformation and modernization to establish buy-in with people in your supplier network vs. making change forcefully, which could damage the relationship.
Balancing Price Management with Relationship Building is Essential
Mike: There’s still a large cost element that people have to manage. The supply chain is a spending environment; doing it wisely and efficiently. We ask ourselves, “What new technology can bring in the next round of efficiencies?” We had large-scale automation, but now, data is more so driving efficiencies.
It doesn’t matter if it’s WK Kellogg or a small startup, you have to continue to keep up and look for new ways to drive that efficiency, because there’s always pressure on price. You can’t pass along cost. You have to manage that down and keep your pricing competitive. That theme’s been around forever, and I don’t see that going away. How you attack it is different, and I think that’s what we’re all trying to come up with.
Q: It’s ironic that within supply chain and procurement roles there is a huge emphasis on the number or price while also building relationships. Data is at the forefront of assessing risk and determining price, but the people component is in some ways agnostic to data.
You can’t pound just on price. You have to have a people, trust, reliability, and relationship component while simultaneously being cost competitive. It’s not one or the other.
Q: There’s two common strategies for buyers to mitigate their risk: consolidating to one supplier to have control via a single source, or involving many suppliers to take risk and reliance off of a singular supplier. What defines that is the quality of information you have about your suppliers on top of capabilities with cutting-edge technology like AI. These advancements free time for humans to focus on improving emotional intelligence and human connection.
Real-Time Data Ingestion Transforms Supply Chain Decision Making
Q: Many companies today are overwhelmed with the amount of data surrounding their business. How has the availability of data over the years impacted your role, the way you utilize data, and the overall role of supply chain professionals?
Mike: I started when data was still driven by paper and pencil, but the math is still the same. For a while, there were large streams of data that we couldn’t utilize effectively. We started collecting data, then thought, “now what?”
Now, it’s evolved to having the capability to collect, and the more data you can ingest, the better capabilities you will have. The answer is provided almost immediately, and it’s actionable. That was always the key.
I can look at data in the past and say what happened, but I can’t change the past. Now, I can look at what’s happening, adjust, and change. That’s where the big efficiencies lie.
It was always kind of about the data, but it’s really about the speed of ingestion, analyzing, and acting on the data. Now, you see things you would’ve never thought were possible 30 years ago.
It’s still driven by the math, but way faster and much more predictive. In the past, it was analyzing what happened vs. helping you predict what’s going to happen.
Cross-Departmental Collaboration is the Key for Future Supply Chain Survival
At Craft, we think a lot about how we can enable collaboration within our platform. What’s the importance of collaboration in supply chain and procurement, and what are the current shortfalls within collaboration?
Mike: I like the way Colgate was organized because procurement was part of the supply chain. I don’t think they need to be separate islands because they are so dependent on one another. Especially if you are running a supply chain that includes manufacturing, your procurement group can make or break you. There’s different skills and requirements, but they are all part of that collaboration around not just how much you are paying, but also around the form, time, and frequency that a certain material or product flows into your process and out as a sellable good. That’s absolutely key.
Keeping procurement as a significant part of your supply chain is essential for collaboration. When separation occurs, it usually leans towards the cost equation.
When procurement is part of the supply chain, other important factors show up. It’s not just about the cost; it’s about the inventory, how it’s delivered, how it flows into your process, etc.
It’s all of those things. And, you have to make sure your suppliers deliver that all of the time. They won’t know that unless you collaborate with them and tell them.
Procurement is an important cog in the supply chain.
Q: It’s certainly not just about cost. For example, recent ESG regulations on issues like forced labor are compelling companies to prioritize ethical treatment globally. As a result, fewer products are being prioritized solely for their low cost. This shift towards ethical labor practices also contributes to reduced carbon output, as companies are less likely to transport products long distances just for the sake of cheap labor.
What is your perspective on the current regulations that are affecting the supply chain?
Mike: The things that actually affect cost over the years are regulations. Unfortunately, it’s sometimes required. Without government regulations, you wouldn’t necessarily do the right thing. Once a regulation is in effect, you innovate, meet the criteria, and still get more efficient. So, it’s almost a catalyst to innovation because it becomes a hurdle that you have to initially jump over.
There is a good case for wise regulation because it will positively affect the environment, people, and the supply chain.
25 years ago, we started managing electricity to be more efficient. It was great for the environment. But, guess what? It saved us a ton of money over time. That wasn’t the initial objective.
We did the same thing with water usage. We were wasting a lot of water, but once we put limits on water, all of a sudden, we figured out how to not use so much water. And, when we did use water, we figured out how to clean it and get it back into the environment properly.
A lot of regulations drive some really good innovation in the supply chain. As much as people whine every time there’s a new regulation, it’s also an opportunity.
Q: It’s intriguing that some companies welcome regulations because they clarify the path, provide a clear agenda, and create a level playing field.
Mike: It standardizes the target and sets a direction on a particular debate.
Q: Whose responsibility it is to ensure positive change in our world and supply chain: governments, corporations, or individuals. What are your thoughts there?
It’s a good question. Ideally, it’s some combination of industry, government, and individuals working together to define success, working in a continuum. The job is never over. You have to continue to innovate and improve.
Industry associations get tainted with defending industry, and are not necessarily interested in regulations. However, they do get involved.
Governments have historically struggled with implementing regulations in terms of understanding the science.
It would be great if there was collaboration between all of the parties for ongoing solutions, but I guess we’re going to have to deal with regulations.
At Colgate, we developed a toothpaste tube that could be recycled that took 5 to 6 years to create. It was a great innovation. We got it approved through the recycling industry to be able to go into the HDPE recycle stream. Instead of patenting it, we gave it to everyone. We let all of the competitors have it because it was the right thing to do.
That’s easy to say, but trust me, there were long conversations about whether we should have kept it to ourselves as a competitive differentiator or not. But, over the course of time, there’ve been other examples (think Mercedes being transparent about their braking systems) where companies have shared knowledge where they could have kept it as a point of difference because it was the right thing to do. I think it’s important to point that out when companies do that.
Q: It’s fantastic that Colgate developed and shared a recyclable toothpaste tube. It is important to celebrate the companies that do the right thing.
We hope platforms like Craft that enhance supplier visibility will help companies shift from a short-term, narrow view to a long-term, comprehensive perspective, enabling them to better understand the impact of abstract practices, and encouraging them to do more good to improve collective well-being into the future.
Organizations’ Capabilities for Contingency Planning will Define their Success
Q: During your tenure at Colgate-Palmolive, there were tons of world events where you were faced with that dilemma, amongst many other challenges. One particular insight we enjoyed from you in our resilience model webinar is the concept of moving from reactive to proactive. And, related to proactivism, there’s preparing for what ifs. Being proactive is preparing for known challenges, but what about the unknown?
What are your keys to quickly and successfully mitigating risk through disaster and crisis?
Mike: There’s crisis management in terms of what to do with people, assets, and making sure everyone is safe, but then there’s business contingency planning. i.e.: if a facility goes down, how do you get back to business with other facilities, third parties, etc. to stay in business?
At Colgate, we did extensive contingency planning, and reviewed it quite often. We did tests where we would go into a facility and say, “Your carton supplier just had a fire and shut down.” They would know what they had to do, and with who they had to validate. They also had to produce, ship, and sell the product to prove that the contingency actually worked. Those kinds of things helped us dramatically during COVID.
Now, when we had multiple crises at the same time, that wasn’t necessarily part of the plan, but it helped us get on our feet very quickly. We didn’t have to ask permission. We knew exactly what we were supposed to do because we planned it and tested it. More of that has to happen.
The time to develop a product shrunk dramatically because we had streamlined approvals and relied on our people’s knowledge. We got things out in the marketplace really quickly. To go from 4 weeks from concept to production vs. 6 months is a big deal.
It’s important that the people and products are safe, but that’s day 1. Day 2 is focusing on how to get back to business. If you plan ahead, the speed will come.
Even with a lot of planning, it still takes time. No one is going to keep inventory or redundant production capabilities. It’s just too expensive. You have to physically change, but you have to know where to go, who to do it with, specifications, artwork, regulatory requirements; it’s very complex. You need to have it all planned ahead of time.
Q: There’s certainly some trailblazing that needs to happen.
What excites you about the SC/procurement space today and into the future?
Mike: On the topic of sensing/demand sensing with AI, we’re going to get to the point of where we’re going to be able to predict very accurately. That’s pretty exciting.
I like being an advisor to companies that are on the cutting edge. I advise them where the value is, but they teach me where the technology is going.
It’s fascinating. I enjoy being a part of it.
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There’s many lessons to glean from observing the complex history and evolution of the global supply chain. Implementing change isn’t easy, but we hope this discussion provided some insight into how you can get started with supplier contingency planning, and inspired you to use emerging technologies while embracing a flexible approach, just like Mike.
If you enjoyed this discussion, watch our webinar with Mike where we share a comprehensive roadmap for navigating the complexities of today’s procurement environment.
Contact Craft directly for general questions or schedule a risk assessment to take a deep dive into your organization’s risks.