Real Time Management of Complex Supply Chains

• Sergio Barbarino

• Research Fellow P&G• Brussels innovation Center.

A Company of Leading Brands

P&G Today

Sales $65.3 Billion

Earnings $10.5 Billion

Countries of Operations ~70

Countries Where Our 180+

Brands are Sold

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P&G Structure

Corporate Functions (CF)

Global Business Services (GBS)

Global Business Units (GBUs)

Set global strategy, lead global

projects, regional HQ’s for execution

Selling & Market Operations (SMOs)

Local commercial capabilities (sales/marketing/

supply/etc.), execute global/regional projects

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Global Beauty

Global Health & Grooming

Global Baby, Feminine, &

Family Care

Global Fabric & Home Care

Sectors Regions

Key P&G CORE objective:Demonstrate how to make an international trade lane secure

Test and prove that better visibility allows optimization and increased resiliency in long and complex tradelanes.

Prove that it is possible to better Synchronize manufacturing processes to supply chain needs, with immediate advantages and value creation potential.

Develop a solution for Temperature peak protection on long ocean tradelanes

CORE achievements:1. We demonstrated with ATT how load securing technology

can avoid smuggling on a critical product componenttradelane between the USA and Europe

2. We tested on a few very long international tradelanesoperated by P&G (GDM) several Visibility solutions (Intelyt,Bollore’, Ocean Insights, SAVI-Panalpina) leading to theidentification of true value creation and an implementationplan.

3. We simulated and are implementing a new planning logic that allows more frequent runs of a single SKU and much better capacity utilization of expensive manufacturing line

1. Load Securing solution

Ariel Pods Critical PVA film Supply ChainDetergent Pods rely on a soluble PVA film to dissolve in the washing machine and release active. Monosol Company specializes in PVA films and out of their Plant in Indiana (USA) they supply P&G Globally as well as its competitors.

Ariel Pods Critical PVA film Supply Chain.

Ariel Pods Supply ChainPVA film is distributed in Europe out of Eindhoeven. While the container arriving from the USA is sealed, there is no real check if the seal in place is the original one applied in Indiana. The container could in theory be used for smuggling anything on top of the PVA innocuous film. Monosol would never know.

ATT solutions (1):1) CMR Authentication.

ATT solutions (2):2) Individual Box Authentication.

ATT solutions (3):3) Container Integrity Authentication via Mechanical/Digital Seal.

2. Trade lane visibility solutions

P&G GDM Case

• The P&G Global Distributor Markets (GDM) organisation operates in all those markets where P&G has no established Sales and/or Distribution organisations. Today GDM operates about 80 markets and growing (e.g. Iran). GDMs represent for P&G a Sustainable Volume Growth opportunity. However the supply chain can be very long and this poses several Supply Chain Resiliency issues including:

– Lack of Visibility: (ETA) leading to:• Poor planning.

• Bullwhip effect: Excessive stocks &/or Out of Stocks

• Poor Cashflow

– Security of the container movements (A risk, not an issue):• risk of smuggling &/or counterfeiting

French DOM/TOM tradelanes.

Savi/Panalpina or Intelyt Tracking Solution.

GEO Fencing.

Sample Shipments Savi/Panalpina GDM.

In implementation we will assume devices are lost. On placing the device,

bactery is activated to maximize charge.

Sample Shipments Savi/Panalpina GDM.

Intelyt Solution with T/RH tracking.

BOLLORE EDI Only Solution.

BOLLORE EDI Only Solution.

OCEAN INSIGHTS EDI Only Solution.

Evaluating the benefit of container visibility

(Purdue University & P&G)

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Approach in pictures

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Cost per unit to expedite

Value of informationTravel time Information later in trip, better quality

Travel time Information earlier in trip, poorer quality

Lower cost to react

Higher cost to react

In this example, the takeaway is that it is better to use more precise later trip

information as long as the cost to react is below a certain threshold (9)

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Relevant Legal constraints for GDM

• For some markets running the pilot using Electronic tracking devices is proving fairly complex due to the request of Customs offices of Import Export certificates for the device itself (E.g. Saudi Arabia, Egypt)

• For these markets no issue is expected with the Bollore’/ Ocean Insights solution

Synchronization solutions(Purdue & P&G)

SUD Production Line layout

4 Scenarii

• Each line dedicated to a package size – “Standard approach”

• Each line dedicated to one FC and different package size produced on both legs –“One pod per Line Mix Approach”

• Each line dedicated to one FC –“One pod per Line Approach”

• Each line dedicated to one FC and there is a large buffer of pods before packaging legs –“With Inventory Approach”

Scheduling Approach - Comparison

StandardOnePerLin

eOnePerLine

MixWith

Inventory

% of actual production in total

time59% 63% 67% 54%

% of setup time in total time

19% 23% 18% 23%

Number of setups 16 14 9 14

Production time (min)

507.4 538.1 411 535.5

0

100

200

300

400

500

600

700

1

11

21

31

41 51 61

71

81

91

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1

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1

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14

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15

1

161

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18

1

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1

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1

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1

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1

25

1

26

1

271

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1

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Pro

du

ced

qu

anti

ty (

case

s)

Time (min)

OnePerLine Mix Standard With Inventory OnePerLine

StandardOnePerLin

eOnePerLine

MixWith

Inventory

# FC changeovers 4 2 2 2

# Brandcode changeovers

12 8 5 8

# Pack Size changeovers

0 4 2 4

Production time Line 30 (min)

296 277.4 224 276

Production time Line 31 (min)

211.4 260.7 187 259.5

Conclusion

Thanks to CORE:

• We could select the visibility solution that was really needed in our case…and advice visibility solution providers on what is true value added.

• We will be able have much more efficient utilization of our manufacturing assets.

• We can recommend a better security system for anti-smuggling in Ocean shipping via Containers.