Procter & Gamble: Building a Smarter Supply Chain

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CASE STUDY December 2002 Procter & Gamble: Building A Smarter Supply Chain Issue/Solution To remain profitable, consumer products manufacturers must find ways to optimize the performance of their supply chains. They need to support marketing promotions better and avoid frustrating consumers with out-of-stock situations in the store. Situation • Procter & Gamble realized it needed a “consumer-driven supply network” to stay ahead in the consumer packaged goods industry. Retailing’s “first moment of truth” is a key focus area for P&G. When the shopper reaches the shelf, is the product there? • Discoveries • • Links between supply chain and CRM processes are critical. Business leads, technology follows. But the…show more content…
P&G decided that sophisticated demand chain management, establishing direct connections between sales and supply chain business processes, could be the key to maintaining its leading position in the consumer packaged goods industry. As a result, a multi-level initiative was launched, which P&G calls its “consumer-driven supply network” (CDSN) program. Retail changes put pressure on the supply chain For the major consumer packaged goods manufacturers, the strategies that are currently being pursued by the world’s most competitive retail chains are changing the game in two important ways. • As consumers come to expect a greater assortment of product options, retailers are responding with greater product differentiation, driving up service level expectations. Cash requirements are creating pressure for shorter order-to-delivery cycles and a move towards flow-through distribution networks. These trends are already beginning to eliminate the safety stocks that used to be held in reserve in the retail supply network. • CAS-1202-0012 © 2002 Gartner, Inc and/or its affiliates. All rights reserved. Page 2 of 7 CASE STUDY Procter & Gamble: Building A Smarter Supply Chain December 2002 This situation creates several new problems that P&G and other manufacturers need to come to terms

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