Colgate-Palmolive's inventory level in raw materials and finished products is likely to reduce by one or two weeks at the end of the current fiscal following such measures to achieve synergy, cost reduction and higher productivity, SAP experts said.

Colgate-Palmolive's current level of inventory is estimated to be in the range of six to eight weeks in raw materials and four to six weeks in finished goods, which is considered normal and in accordance with industry standards. This is likely to be reduced by a margin of one to two weeks at the end of the current fiscal, analysts added.

For the financial year ended March 31, 1998, the company's inventory levels were higher than the previous years, valued at Rs 120.06 crore as against Rs 97.88crore in 1996-97. The company said that this was solely due to an increase in the finished goods. This increase was largely due to a planned new product launch -Colgate Double Protection--in June, 1998.

The company has rolled out a series of new products this year, including its leading global formula `Colgate Total' and `Colgate Double Protection'.

Colgate aims to complete the installation of SAP integrated software, the leading Enterprise--Wide Resource Planning System, by November, 1998.

The company has already implemented the RP software for its finance and production modules. These modules have been operational since July, 1998. The software is currently being progressively implemented at various stock points across the country.

The company initiated the process of installation of SAP system in October, 1997, in order to achieve synergy, cost reduction and higher productivity. The power of SAP's ERP software system lies in real-time integration, linking a company's business processes andapplications, and supporting immediate responses to change throughout the organisation--on a departmental, divisional or regional scale.

Colgate-Palmolive will be among the few companies to have completely implemented the integrated software within a short span of 13-months. The project has been undertaken with strong support from its US-based parent.

With its offices, factories and warehouses spread over several geographic locations, the progressive implementation of this ERP system is expected to bring in beneficial results for the company through process improvements and operational efficiency. VSAT networks are also being used to complement high speed terrestrial lines in order to connect distant warehouses and customers to the central offices in Mumbai.

Besides implementing the SAP, Colgate-Palmolive has also set up a regional distribution centre near Mumbai in March, 1998, to improve the efficiency of its distribution system in order to render prompt service to its customers. With its productsmanufactured at multiple locations and its warehouses spread throughout the country the new regional centre is expected to help minimise inventories and optimise freight costs.

The combined impact of both the initiatives are expected to conserve the company's resources and improve its supply chain management system which would help reduce its working capital requirements.