100 Great Supply & Demand Chain Projects

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100 Great Supply & Demand Chain Projects

July 2011

Supply & Demand Chain Executive

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For establishing a faster and safe product quality testing process to improve cash flow and reduce warehousing, working capital and inventory requirements, we are pleased to include Celsis International in the 2011 Supply & Demand Chain Executive 100.
— Editorial Staff of Supply & Demand Chain Executive

Complex supply chains can be interrupted or stalled by numerous problems and pain points. For Kao Worldwide, which manufactures hair and skin care products and soaps for a number of brands, one such pain point was the time its products spent awaiting microbial testing results.

Consumers, good business practices and strict government requirements all demand that products for sale not be contaminated. To ensure this, traditional microbiological testing requires anywhere from three to seven days to confirm the absence of unwanted bacteria, yeast or mould. This keeps capital tied up in idled inventory, consuming warehouse space and adding days to the production cycle.

Company leaders at Kao (formerly the Andrew Jergens Company) wanted a safe yet faster product quality testing process to improve cash flow and reduce warehousing, working capital and inventory requirements. The company’s search led them to Celsis, which manufactures rapid microbial detection systems that drastically decrease the amount of time required for product release testing. Celsis systems are in use in more than 50 countries by customers including consumer products giants Procter & Gamble and Unilever, Con-Agra Foods, Abbott and Schering-Plough/Merck.

Celsis’ Rapid Detection systems use a patented, enzyme-based, amplified ATP bioluminescent system, featuring a sensitive light instrument called a luminometer, to accurately detect the presence of living microbes in product samples. Ideal for high-volume manufacturing, the rugged Celsis system was designed also for ease of use.

Celsis, a long-time customer, and the management-consulting firm Arthur D. Little collaborated in the development of a Financial Impact Assessment to quantify the value of implementing the Celsis technology. The assessment analyzes key inputs such as the average daily value of finished goods, the current and projected time for test results, the cost of capital and more. On average, according to the model, customers can expect to see a return on invested capital in six to nine months, and to realize more than $500,000 in five-year net present value (NPV) at a single plant. The model also supports multiple plant calculations.

For Kao Worldwide, implementing Celsis means the Quality department generates testing results in one ortwo days, rather than the three or four days required with its previous testing method.

“Since the technology allows us to get micro results in half the time, we are able to release products and ship products pretty much as needed,” said Mark Entrup, Cincinnati-based USA corporate microbiologist for Kao. “It has also reduced our warehouse space significantly. That is, instead of having to produce and then stockpile, the technology allows us to produce as orders require.”

In the rare instances when contamination is suspected, Celsis helps its customers know and act faster. “By detecting potential problems earlier, you end up throwing away less product and the potential damage to your company and your brand is greatly reduced,” said Lindsay Tjepkema, marketing and communications manager with Celsis. “In this time, with the economy being the way that it is, it’s all the more important to make sure that you’re doing things right, and Celsis really helps you do that.”

Manufacturers looking for cost-efficient ways to streamline operations and free up working capital should be looking at Celsis. Since 1992, the company’s unique, innovative solutions have been helping companies save money while getting safe products to market faster.

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