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Procter&GambleGroupMembers:MarkHowellMaddyRajManoj

SahareNimeshPujara

JaimeSoteloP&GCompanyOverviewWhatisaGlobalOrganization?Onethatsellsproductsorprovidesservicesonacontinentdifferentfromthatofitscountryoforigin.Ifitsellsproducts,itmustownandoperateplantsonacontinentdifferentfromthatofitscountryoforigin.Itisnotsimplyenoughtosellproductsinanothercountryandonlyhaveanofficefacilitatingthosesales,orout-sourcethemanufactureofproductstobesoldinthehomecountry.GlobalOrganisationIftheCompanyisprovidingservicesonacontinentdifferentfromthatofitscountryoforigin,itmustemploylocalresidentstoprovideatleastpartoftheservices.IsP&GGlobal?P&GcanbeconsideredaglobalOrganizationasithasoperationsin70countries,encompassingEurope,theMiddleEast,Africa,Asia,LatinAmerica,aswellasitsnativeNorthAmerica.MostP&GproductsareproducedorassembledinP&Gownedfacilitieswithonly10%producedbyathird-partyorsub-contractedmanufacturer.P&GSupplyChainIssuesAimtoachievehighcustomersatisfaction;Focusonprofitabilityandmarketshare,throughamasteringoftheSupplyChain;AimtomakeSupplyChaincapabilities,thecoreofthebusinessmodel;P&GSupplyChainIssues(Ans)CreationofanewstrategyandbringingtheCompany'sothercoreactivitiesintoalignmentwiththenewbusinessmodel;andAccountselection,in-customeroperations,channelstrategy,coreoperationscapabilities,andManagement/OrganizationStructure.P&GSupplyChainCoreBeliefMasteringtheSupplyChaincreatesadistinctivebusinessmodelthatshiftstheprimeobjectiveofSupplyChainManagementfromCostControltoRevenueEnhancementtoCustomerSatisfaction.P&GInformationFlowP&G’sInnovationFirstpartneredwithWal-Marttodevelopapioneeringcontinuousreplenishmentsystem;P&GreplenishesWal-Mart'sfacilitieswithoutPurchaseOrdersbasedontheretailer'sproductmovementdata;andEvolvingtheirprimarySupplyChainfocusfrommarketingtoproduction,inventories,andlogisticsinresponsetochangingbusinessrequirements.ProblemsMainConcernwasexpressedoverwhatwouldbedonewiththemajoraccountsthatdidnot"fit"thebusinessmodel.P&G’s“SupplyNetwork"

Agent-basedcomputermodelwasdevelopedwithBiosGroup,Inc.inSantaFe,NewMexico.Thisnetworkcovers“5billionconsumersin140countries”.NEWP&G’sAgent-basedmodelingofcomplex,adaptiveSystems:SupplyNetwork

AdvantagesRelaxationofrigidrules,Moreflexibilityindistribution,andMoreflexibilityinmanufacturing.“Sofar,byusingthistechnology,thebiggestimpactsonourbusinesshavebeenimprovementsinservice,cost,andspeed.Weknowwe’redeliveringbetterconsumerservice,bettercustomerandsupplierservice,andbetteremployeeservicethroughouttheworldasaresultofthewaywe’reusingtheInternet-based‘Agent-basedmodelingofcomplex,adaptivesystems:SupplyNetwork’.”A.G.Lafley,PresidentandChiefExecutiveOfficer,Procter&Gamble,says:HowdoesP&G’sSupplyChainManagementinfluenceitsResults?

Out-of-stockitemsareexpensive.

Anewglobalstudyrevealsthatgaps

onshelvesarecostingsupermarkets

upto4%ofsales.Cont.ThestudyfundedbyP&GandconductedbyresearchesinEurope,examined661retailoutlets,32consumergoodscategories,andsurveyed71,000consumersin29countries;Thestudyfoundthatanaverageof8.3%ofitemsareout-of-stockatanyonetimearoundtheworld;Cont.SupplyChainteamshavethechallengeofensuringthattheirproductsareon-shelf,on-schedule,andon-budget;

Worldwide,over60,000peopleworkinSupplyChainManagement;andTosucceedinSupplyChainManagement,P&Gworkstowardsaperfectbalanceinvolvingitsbusinessstrategy,itshugetechnicalresources,andmostimportantly,itspeople.

P&GPurchasinghasskillsinmarketanalysisandbuildingrelationships,andconsultswithtopManagement,negotiatingandinnovatingglobalandPan-EuropeansourcingstrategiestoenhancetheCompany’soverallCompetitiveAdvantage.P&GLogisticsisresponsibleforpredictingcustomerdemand,andthenensuringtheefficientdistributionofP&GproductsthroughtheSupplyChaintosupermarketshelves.Cont.Manufacturingmakestheproducts.P&Gappliesleadingedge,high-techsystemsandprocessestoproducehighqualitygoodsatthelowestcost,thussupplyingconsumerswithhigh-valueproducts.CustomerServicepeoplefocusonthefinalstepoftheSupplyChain–thatofdeliveringproductstocustomersintherightquantities,attherighttime,andexceedingtheirlevelsofsatisfaction.MajorCompetitorsofP&GPresentindifferentmarkets,inwhichP&Galsoexists:Johnson&Johnson

- BabyProducts;

SaraLee,Nestlé’s,SA - Food&HealthProducts; andAmway,TheBodyShop - CleaningProducts,

PersonalHealthcare.CurrentOutlook:Over2007outletsaroundtheworldoperatingin50countries,ofwhich596arecompany-ownedwiththerest,franchiseesofparentcompanies;

HeadfranchiserscouldbeintheUK,USA,Mexico,Austria,France,Germany,orDenmark;andRemaining42marketsownedandoperatedbyindependentheadfranchisers.SupplyStrategies(Supplier)RetailandFranchisesSAP(anEnterpriseResourcePlanningSystem),FOAD(AutomaticInventoryReplenishmentSystem),Aglobalinternetstructure–toresolvetheseissues,andFirstElectronicPointOfSale(EPOS)System.

Source:WebWorld-BodyShopDirect,1999.

HowareP&G’sSupplyChainStrategiesbetterthantheirCompetitors’?P&Ghasestablisheditselfasamarketleader,asaresultofcertainstrategiesitappliesonitsproducts’SupplyChains&impactingdirectlyonSupplyChains:

P&Gacquirescompaniesandproductsperformingwell,withgooddemand,andwell-establishedinthemarketplace;P&Gisinvolvedinredevelopmentandconsolidationofexistingproductstoexpandcustomerbasewithsameproducts;P&GdrivestoreduceitsCapitalspendingtoacertainpercentageofSales;Cont.P&Gdrivestoconcentrateonandbuildupitscorebusinessesandleadingbrandsintostrongermarketleaders;andInadditiontodevelopingcloseworkingrelationshipswithitscustomersandmainsu

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