Procter & Gamble Brief History

Issues that we think are interesting /important

first :

v  Creating a new strategy & bringing the company's other core activities into alignment with the new business model .

v  Account selection, in customer operations, channel strategy. core operations & management /organization structure .

* Belief :

Mastering supply chain creates a distinctive business model that shifts the prime objective of supply chain management from cost control to revenue enhancement to customer satisfaction .

*Problems :

Main concern was expressed over what would be done with the major accounts that did not "fit" the business model. P&G "supply network" :

1- Agent-based computer model was developed with Bios Group inc. In Santa Fe, New        Mexico.

2- This network covers "15 billion consumers in 140 countries"

*Advantages:

1- Relaxation of rigid rules

2- More flexibility in distribution

3- More flexibility in manufacturing

Second:

           In 2000 Procter & Gamble (P&G) was at a crucial point in its long history. One of the world’s best-known corporations and creator of some of the world’s most famous and successful brands was at a crossroads. Its CEO, Dirk Jager had left after a mere 18 months in the job. In March, the company announced it would not meet its projected first quarter earnings. The stock price was spiraling downwards – falling from $116 in January to $60 per share by March. The massive loss of $85 billion in market capitalization was matched by the loss of confidence within. It provoked media frenzy. Perhaps most poignantly, Ad Age headlined its front page story: “Does P&G Still Matter?” It was one of many column inches devoted to the apparently impending demise of the company.P&G’s new CEO, AG Lafley, provided an instant dose of reality: “We weren’t delivering on goals and commitments to analysts and investors. Major P&G businesses were underperforming; P&G brands were not delivering good consumer value: we weren’t consistently leading innovation, and prices were too high, they were too internally -focused. Consumed with the massive re-organization, and with so many people in new jobs, they were all spending too much time managing internal transactions.”

Third:

      IDA launched its campaign against Procter & Gamble in 1989. Our goal to stop the company's blinding, burning, maiming and killing of thousands of animals each year in product tests that are cruel, outdated and not required by law. At the beginning of our campaign, Procter & Gamble was still using dogs in product tests. Now its TIDE OF TORTURE continues on rabbits, ferrets, hamsters, guinea pigs, mice and rats. And, while the company claims that it no longer uses dogs in product testing and that it has reduced the number of animals used by 90 percent, it refuses to back up any of its claims with facts. For example, Procter & Gamble refuses to release to the public information regarding the actual numbers and species of animals used, or the types of tests it forces these animals to endure.

forth:

Procter & Gamble Issues with Building Trust

1)      P&G’s new Pampers diaper causes chemical burn has resulted in the U.S. Consumer Product Safety Commission launching an investigation. class action lawsuit was filed against the company.

2)      Procter & Gamble is issuing a recall of some of its Pringles potato crisps.

 Managers said the recall is voluntary, but comes after a recommendation from          the Food & Drug Administration to the food industry.The affected products are:Pringles Restaurant Cravers Cheeseburger & Pringles Family Faves Taco Night.

3)      Procter & Gamble is issuing a recall 10 shades of Clairol Natural Instincts hair coloring in the U.S., Canada and Puerto Rico, citing a component mismatch that could potentially cause an undesired color.The  company said it discovered a mismatched sachet in the product's kits that could lead to a different color than intended. After that , company removed the products from stores.

What we like /don’t like of company’s information systems

ü We like :

1)      Security .

2)      Protects personal information .

3)      Done work effectively and efficiently .

4)      Less cost .

5)      Less effort with high quality .

6)      The ability to speed alignment between service lines and increase project visibility—particularly among those requesting resources from multiple departments or service lines .

7)      Increase profitability .

8)      Scaling across the organization .

9)      Cost savings and ongoing return on investment .

10)   Improved Data Integrity and Custom Reporting .

11)   Increased Collaboration and Teamwork .

12)   The system enabled P&G to design and customize its marketing strategies for each brand .

13)   Control all of the elements of producing and selling a product .

ü Do not like :

1)      Doesn’t presenting amounts and dates.

2)      Luck of supporting for localization.

3)      Being involved in all stages of distribution can make it difficult for a small business owner to keep track of what is happening.

4)      No privacy.

5)      Available for other organizations.

6)      In the case of bankruptcy the company may loss the data .

Types of information systems used and how information systems are helping the company:

1)    Supply chain information system (enterprise system) :

Supply-Chain Integration through Information Sharing:

Channel Partnership between Wal-Mart and Procter & Gamble

We will describe here the development of channel partnership between a manufacturer (Procter and Gamble, or P&G) and a retailer (Wal-Mart). Both major players in their industries, P&G and Wal-Mart found a way to leverage on information technology by sharing data across their mutual supply chains. The resulting channel has become more efficient because channel activities are better coordinated. There are reduced needs for inventories with increased sales by focusing on selling what the customers want. All in all, the supply chain between P&G and Wal-Mart has adopted a much better customer focus through the channel partnership. And it is mutually beneficial. This integration of the supply-chain information systems will become increasingly important both for enhancing business-to business electronic commerce and for supporting the increasing volume and customization in business-to consumer electronic commerce. Together they use technology as a method to drive costs, and openly share data to better understand the joint customer - the consumers. To emphasize the strong commitment to develop a mutually beneficial partnership, the P&G and Wal-Mart team developed a mission statement, which is this:

“ The mission of the Wal-Mart/P&G Business team is to achieve the long-term business

objectives of both companies by building a total system partnership that leads our respective companies and industries to better serve our mutual customer - the consumer.”

Next, the infrastructure that was needed to link P&G’s data with Wal-Mart’s data proved to be a critical step in understanding the consumer’s needs. Wal-Mart was just coming online with a new data warehouse that allowed them to track sales of all products in each of their stores. P&G and Wal-Mart jointly developed a data highway that linked P&G data to Wal-Mart data driving down costs and sharing information to meet the consumer’s needs.

• The Data Highway for the Manufacturing/Retailing Integration;

The data highway concept was straight forward, Wal-Mart had scanners in all

of their stores to track, measure and analyze their business. Wal-Mart collected its own data then analyzed the results. P&G also had data about the consumer which was used to make product decisions. For example, why did she/he prefer a certain product or go to a certain store to buy. Therefore, these insights from P&G about the consumer were combined with information regarding what was happening inside the store from Wal-Mart thus creating an information data highway. As a result, the integration of P&G and Wal-Mart data played a key role in progress.

Leveraging technology to drive costs out of the supply system is another important aspect

of the information systems function. The delivery of products to the end consumer involves a series of steps including raw material delivery, conversion to a finished product, transportation to a distributor or customer distribution center, transportation to the store and placement on the store shelf. The degree to which all parties involved can drive costs out of these systems result in corresponding savings that can be passed on to the consumer in the form of lower product costs.

• Information Sharing and Continuous Replenishment:

An important strategy for managing integrated supply chains is to share information

among supply-chain partners. One of the main benefits of sharing information is the reduced need for inventory. As a result, the supply chain achieves better performance in terms of financial returns, service level, and turn-around times. With information shared among the manufacturer and the retailer, the manufacturer can use the information about the inventory level of the retailer to manage the frequency, quantity,and timing of the shipments-- instead of waiting for the retailer to place orders. This practice,referred to as continuous replenishment process (CRP), enables the manufacturer to reduce the

inventory necessary and to plan the shipments more efficiently as has

been implemented by P&G and Wal-Mart. P&G replenished Wal-Mart’s inventory based on inventory data received from Wal-Mart’s distribution center (DC). This data allowed P&G to manage the inventory levels to insure that P&G products were in stock at all times. P&G used their information data highway to fundamentally change the replenishment process by linking Wal-Mart’s inventory data at their distribution centers and P&G’s replenished inventory based on movement of product through their DC’s. P&G reduced the order cycle time (amount of time from the order generation to delivery) by 3-4 days. This process also dramatically increased inventory turns which resulted in

a reduction in the inventory of the entire system.

2)    Management Information System , Decision Support System , & Intelligent Support Systems :

Adobe Live Cycle Reader Extensions system:

Use the Adobe® LiveCycle® Reader® Extensions to quickly and easily activate functionality within Adobe Reader software, enabling end users to save data locally, add and save annotations, apply digital signatures, dynamically embed data in a barcode, and integrate with web services for PDF forms and documents. LiveCycle Reader Extensions ES2 extends document- and form-based processes outside your organization to better engage with customers, partners, constituents, and colleagues, extending the value of your investments in enterprise applications and This is help the company in

•  forms collaboration .
• digital signatures P&G used as a part of its elab notebook initiative to create , manage, review, sign, and approve research and development information .
• Extend business processes and improve collaboration across the firewall.
•    Reduce processing costs and errors.
•  Improve security, archiving, and compliance.
• Author, update, and decode 2D barcoded forms

3)    point-of-sale data system :

This system used To ensure that customer would always find the product they wanted on the shelf, P&G built systems that would trigger shipments only when customers actually bought product. Taking a cue from Wal-Mart, one of P&G's largest customers and well known for its continuous replenishment systems, P&G now uses point-of-sale data provided by retailers to generate orders. P&G trucks now deliver only what is needed based on customer sales.

This system also has saved retailers over $250 million in inventory costs alone. Now, when dealing with highly automated retailers such as Wal-Mart, 40 percent of all orders are computer generated and based directly on actual sales recorded daily and weekly. The sales force was equipped with laptop computers, and they send daily reports to headquarters recording changes in customer buying habits— and the reasons for changes in those buying habits. At headquarters, sales and marketing specialists analyze the data and quickly adjust production schedules to both actual purchases and anticipated demand.

4)    QuickBase System :

With 138,000 employees in 80 countries, P&G faced the challenge of managing data and processes throughout its multiple business units around the globe.  Teams used thousands of Excel spreadsheets to manage numerous projects, making reporting an arduous and often inaccurate task.  The basic administration and upkeep of these documents was also time and resource heavy.

P&G deployed its first Quick Base database application just weeks after purchasing it, consolidating hundreds of projects into a single, accessible online database. One of the biggest benefits of using Quick Base is the ability to speed alignment between service lines and increase project visibility—particularly among those requesting resources from multiple departments or service lines.

After seeing the value and ease of QuickBase – and how quickly and affordably it was installed – other P&G teams developed their own QuickBase database applications to address their inefficiencies. Today, nearly 70 custom-built project, process and portfolio management applications are driving increased collaboration, productivity and visibility among more than 6,000 geographically and technically diverse users – all managed by just one administrator.P&G uses technology in order to better serve consumers, customers, employees, and others.P&G actively promote best privacy practices and consumer benefit for emerging technologies that may have an effect on privacy, such as radio frequency identification tags used to manage product inventory.

Company Background

Ø  Procter&Gamble became the world’s biggest producer and seller of consumer products thanks to the acquisition of Gillette in 2005.

Ø  History of Procter&Gamble began in 1837, when the candle makers William Procter and James Gamble decided to join their effort and established company Procter & Gamble.

Ø  Mission of Procter&Gamble is to provide products of superior quality and value that improve the lives of the consumers all over the world. This mission is one of the cornerstones of the company’s success.

The company was established in American State of Ohio, in the city of Cincinnati, where is the company headquarters up to the present day. After the World War II the company started to expand into Europe and further to the rest of the world. Every day Procter & Gamble products touch the lives of more than 2 billion consumers around the world and help to improve the quality of their lives. We have one of the largest and strongest portfolio of quality brands, including for example laundry detergents Ariel, Tide, Bonux, Vizir, dish care products Jar and Fairy, diapers Pampers, paper tissues and towels Tempo, Charmin and Bounty, potato chips Pringles, hair care Pantene, Head and Shoulders, Clairol and Wella, deodorants Old Spice, Secret, Gillette, cosmetics Max Factor, Oil of Olaz, Laura Biagiotti, Hugo Boss, tooth paste Blend-a-med and Crest, dog nutrition Eukanuba and number of other world-known brands.

In 2005 Procter&Gamble operated on the markets of more than 160 countries and was employer for over 75 000 employees. The company has also several plants in Central and Eastern Europe. Besides the key producer of laundry detergents and liquid detergents Rakona, there are producers of similar product assortment in Romanian Temesvar and Russian Novomoskovsk; important producers of paper products are plants in Ukrainian Borispol, in Budapest and Warsaw.