Kimberly-Clark’s AI Strategy Is as Much about Transforming the Business as It Is a Technology Transformation Strategy

Kimberly-Clark, a manufacturer of tissues and personal care products, is not one of the first companies that comes to mind when drawing up a list of manufacturers where Artificial Intelligence (AI) is becoming embedded in supporting operations. However, the company states, “Kimberly-Clark is on a mission to transform to become a data driven and AI-First company.”

The company’s manufacturing operations involve converting pulp and fiber recycled wastepaper materials into tissues and polypropylene and synthetics into personal care products. To support its manufacturing operations, Kimberly-Clark is prioritizing securing supplies, managing inflationary pressures, and ensuring productivity levels to maintain and improve operating margins of 13.6%.

AI is being used elsewhere in the business to anticipate consumer demand and now the company is looking to embed the technology across its operations by implementing Machine Learning (ML), AI, and Robotic Process Automation (RPA) solutions. Furthermore, the solutions will be introduced in collaboration with sales and marketing, supply chain, and manufacturing teams.

Kimberly-Clark and other pulp and paper producers formed part of ABI Research’s recently published Digital Transformation in the Pulp and Paper Industry Update (PT-2747) with regard to digital transformation.

In July 2022, Kimberly-Clark announced the appointment of Zack Hicks in the newly created role of Chief Digital and Technology Officer. Zack joins the company having spent 26 years at Toyota Motors North America and Toyota Motor Sales, USA, with his most recent role being Chief Executive Officer (CEO) of Toyota Connected (the company’s startup that acts as the firm’s data science hub for connecting vehicles, customers, and businesses through ML and AI).

Before Hick’s arrival, work was already underway to aggregate data from across the firm to provide a single, comprehensive view of the customer—a “consumer 360” platform. One of the objectives for the platform is to optimize pricing promotions. The company’s AI strategy looks to embed AI not just in customer-facing operations, but also functional, technical, and operational teams to improve the company’s use of data analytics in its business processes and decision-making.

Practical steps include creating a Digital Technology Systems (DTS) group with responsibilities that include data governance, developing, and embedding advanced analytics solutions supporting entire business processes having worked directly with the business domain experts. As part of delivering projects of this nature, the company has created the role of AI Strategist, who will not only ensure that ML/data science solutions are linked to solving business and engineering challenges, but also act as a trusted advisor to business teams regarding the adoption of AI.

The AI strategy is not “AI washing,” rather the modeling processes included in any algorithms that need to be understandable to a stakeholder, be tied to solving business problems, and provide actionable recommendations.

The recruitment of Zack Hicks signals the desire to not only use data more effectively, but also better align manufacturing, supply chain, and customer facing teams. In addition, the AI strategy forms part of transforming the entire business, rather than being just about technology.

It’s early days for the AI strategy, but Kimberly-Clark has put in the foundations for success, including:

• Upskilling employees and addressing the need for change by creating the KC University, which includes in-house classes, as well as seminars and summits.
• Embedding AI in the company’s culture by engaging stakeholders via discussions groups, distilling AI/ML concepts by creating and showcasing success stories and via newsletters and internal social media channels in what the company refers to as raising the “Artificial Intelligence Quotient” across Kimberly-Clark.
• Ensuring that the initial solution can be scaled to equivalent business functions and regions.

While Kimberly-Clark was ahead of its peers with regard to digital transformation, these endeavors have not led to the firm achieving industry-leading operating margins with UPM posting margins of 17.79% and Mondi 14.17%. Kimberly-Clark’s operating margins of 13.6% surpass International Paper’s 8.8% and the company will need to link AI deployments to improving operating margins to retain commitment from the boardroom.

Please refer to ABI Research’s Digital Transformation in the Pulp and Paper Industry Update (PT-2747) for more insights into the use of digital technologies by pulp and paper firms.