P
lanning Success story
Procter & Gamble tames inventory rocter & Gamble, founded in
P
consumer products company with
Complex business dynamics
2010 sales exceeding US$76.7
Business dynamics have been growing
billion. Some 4 billion times a day
increasingly complex in the consumer
1837, is a leading global
“
in 180 countries, P&G touches the lives of
products industry. Product and process
people around the world through its familiar
innovation are increasing at ever-greater
brand names – Tide, Crest, Gillette, Pantene,
speed. Product categories are broadening in
and more than 200 others. P&G competes in
response to consumer needs. Increased need
26 distinct product categories, such as Hair
for packaging enhancements is leading to
Care, Paper Towels, Cosmetics, Skin Care,
SKU proliferation. As a result, P&G’s multi-
Oral Care, Blades & Razors, Diapers, and
echelon global supply chain has also been
Fabric Care.
growing increasingly complex due to global suppliers, unique materials requirements and
P&G’s product supply planning workforce plans
Voyager Inventory Optimisation makes recommendations for changing levels and placements of safety stocks across raw materials, work-in-process and finished goods, while maintaining P&G’s high service level targets. ‘What-if’ analyses of current policies identify multiple opportunities for additional reductions over time.”
increasing demand from developing markets.
material supply, capacity, inventory and logistics
optimisation, safety stock was cut by more
for the company’s 500 supply chains. The total
P&G has long focused on reducing its
than 10 per cent through diligent work with
supply chain network comprises 145 owned
inventories and improving materials and
suppliers to reduce material inventories,
manufacturing facilities and 300 contract
production planning, while still maintaining
collaboration with customers to better
manufacturers, resulting in over 6900 unique
superior customer service. Prior to
manage inventory residing at retail outlets and
product category-market combinations served.
implementing multi-echelon inventory
implementation of company-wide ERP and APS information systems. P&G was not done yet, however – the company’s overarching business philosophy is one of demand-driven supply chain and continuous improvement.
A multi-echelon inventory optimisation solution P&G’s inventory management process periodically optimises strategic inventory decisions and policies. This process is triggered by key events, such as new product introductions, changes in market conditions, demand spikes, capacity shortages, and changes in supplier, distribution or logistics strategy. A decision support tool that provided collaborative business intelligence would help Procter & Gamble touches the lives of people around the world through its familiar brand names.
24
IT
MANUFACTURING
&LOGISTICS
May 2011
P&G make sound strategic decisions around
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