Study and Analysis of Study and Analysis of Supply Chain activities of Supply Chain activities of

2013

Let’s get to know P&G in briefLet’s get to know P&G in briefIndustry Consumer goodsConsumer goods

Headquarters Cincinnati, USACincinnati, USA

Founded 18371837

Founders William Procter & James GambleWilliam Procter & James Gamble

Products Foods, beverages, cleaning agents and Foods, beverages, cleaning agents and personal care productspersonal care products

Revenue US$ 84.17 billion (2013)US$ 84.17 billion (2013)

Net income US$ 11.31 billion (2013)US$ 11.31 billion (2013)

Employees 121,000 (2013)121,000 (2013)Countries 160 countries.160 countries.

Flows in a Supply Flows in a Supply ChainChain

Customer

Material

Information

FundsSupplier

SCM of P&GSCM of P&G SCM contributes to the bottom line either by:

Reducing the cost Increasing the sales

Manufacturing operations are based in(other than India):United StatesCanadaPhilippinesMexicoLatin America           EuropeChina (31 wholly owned factories) and other parts of AsiaAfricaAustralia

Suppliers for P&GSuppliers for P&G More than 80,000 suppliers Suppliers of the Year:

Havpak Inc. Hayco Ltd. Nelson Packaging Company Inc. Nippon Shokubai Company Ltd. Novozymes Pegas Nonwovens

News: seeking to pay its bills in 75 days from the average of 45 days

P&G Recognized As Supply Chain's "Best in Class" –Survey(IndustryWeek)

P&G is giving 6% margin to the distributor P & G is spending 30-35 % of its sales in Advertisement and

Promotion which is highest in the industry.

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Typical Distribution of P&G ProductsTypical Distribution of P&G ProductsManufacturers

Marketing Agents - State wise

Wholesalers/Distributors

Chemists Shops, Provision Stores ,

Retail Outlets, Big Markets etc

Example: Detergent Example: Detergent supply chainsupply chain

CustomersSupermarketDistribution CentersP&G

Plastic cupProducer

Chemicalmanufacturer

(e.g. Oil Company)

Packaging

Paper Manufacturer

TimberIndustry

Chemicalmanufacturer

(e.g. Oil Company)

3-9

Wal-Mart and P&G SCMWal-Mart and P&G SCM

Five Factors Motivating Supply Five Factors Motivating Supply Chain RedesignChain Redesign

1. Deregulation of the transport norms: lowered transportation costs

2. Product compaction: more product per truckload3. P&G's focus on TQM improved reliability and

increased throughput at every plant4. Decrease in product life cycles from 3-5 yr to 18-24

months5. Corporate acquisitions gave P&G excess capacity

Supply Chain Initiatives of P&GSupply Chain Initiatives of P&G

• Collaborative planning forecasting and replenishment (CPFR)

Collaborative processes Integrated planning and forecasting processesReplenishment processes

• Consumer Driven Supply networkEfficient demand forecasting

Why P&G is better?Why P&G is better?

BRAND LOYALITY DISTRIBUTION CHANNEL INNOVATION PRICING STRATEGY QUALITY OF THE PRODUCT

Global CompetitorsGlobal Competitors

ChallengesChallengesBusiness Analytics team determined that

manufacturing and raw-material costs dominated distribution costs by a very large margin.

Distribution-location problemTransportation costsUncertainty in demand and/or supplyChanging customer requirementsDecreasing product life cyclesCut Throat Competition: Price wars, Media buying,

Retail space, Recession

ConclusionConclusionP&G is one of the largest and amongst the fastest

growing consumer goods companies in India.P&G India now serves over 650 million consumers

across India.P&G is the best overall company for leadership

development.Fortune magazine awarded P&G a top spot on its list

of "Global Top Companies for Leaders“