As Colgate strives for continuous improvement, one of the key ways the Company gains efficiencies is from the regionalization and globalization of its businesses. Starting in December 2004, the Company embarked on a global four-year restructuring and business-building plan that encompasses about 100 individual initiatives designed to generate savings and accelerate growth.
A major element of the program is a global supply chain with fewer but more sophisticated global and regional state-of-the-art manufacturing centers. During the four years, about one-third of Colgate’s 78 factories worldwide are set to close, and several others will be reconfigured. In addition, the purchasing function will be managed globally and the business support functions not dependent on local expertise will be centralized in global and regional shared-service centers.
Some of the restructuring initiatives will actually increase the size of certain staffs, particularly the sales, marketing and human resources organizations. Much of this growth will take place in high-potential markets such as Eastern Europe, Russia, China, Latin America and Asia. In addition, Colgate is expanding its new product groups in the U.S. and abroad.
In other areas, the requirement for people will be less. An estimated 12 percent of the Company’s workforce will be affected by the restructuring plan during the four-year period. Some reduction in staff will come from employee attrition. To help minimize the disruption of people’s lives whose jobs are being eliminated and to support them, Colgate is offering a range of outplacement services such as résumé development, career-transition seminars, online job search and career management tools. While the restructuring will be unsettling for some people, Colgate views it as essential to continue to strengthen its worldwide leadership positions in its core businesses and to sustain future profitable growth.
