One of the largest manufacturers supplying grocery

to retailers and wholesalers

Leader in designing how branded consumer goods go
to the market
Strong customers pull for P&G products
Products were sold through multiple channels, with
grocery retailers, wholesalers, mass merchandisers
and club stores

Recognizes the need to serve the needs of both the

consumer and the channel in order to be successful
Changes at P&G in affected both the company and
the entire channel
Focus on improving consumer value by eliminating
non value added processes in the channel

Swings in price were creating variability and massive

inefficiency in the entire grocery supply chain
Uncertainty in demand increased manufacturer
inventory requirements and higher manufacturing
costs
Profit margins for the retailers were very low since
costs were very high due to inefficient operations

The retailer provides P&G with daily data on

warehouse orders received from the stores
P&G uses the daily warehouse shipment data to
determine warehouse replenishment volumes
needed
This would limit the retailers warehouse inventory to
acceptable levels, eliminate costly LTL shipments, and
reduce stock outs

EDI is used to transmit data from the retailer to P&G

on warehouse product shipments to each store
EDI is an enhancement for the CRP and it provided
essential platform for CRP operations
It is a powerful tool when combined with proper
process re-engineering
It enabled transfer or large amount of error free data
between companies

Benefits
Reduces transaction cost
Enables transfer of huge data
Error free transfer

Threats
In case of problems, seeks manual intervention
Potential for huge errors without human buffer
Increases cost for P&G due to manual rework
Without CRP it is useless

Rewrote the entire ordering, shipping and billing

(OSB) system
The OSB system supported pricing, ordering,
shipping, invoicing, and separate credit systems
The OSB integrated to many systems that did not
work well together across functions and product
sectors
The system was designed to eliminate manual
processing steps and not to redesign the existing
processes

Redesigning the ordering process involved a

combination of systems and business process
changes
Shared database for product pricing and product
specifications
The batch processing system which was both
inefficient and ineffective was upgraded

Benefits
Standardization of the process
Automation
Reduction of complexity
Reduction in error
Reduction in cost of the processes

Threats
Resistance to change
Time and cost for implemention

P&G led the grocery channel transformation

Moved from brand management to category
management
Improvements in manufacturing and planning
processes
Created value to the customers

1993 P&G sold CRP system to IBM subsidiary (ISSC)

The P&G CRP system was to be offered by IBM to all
manufacturers
IBM CRP service offering allowed retailers to interact
with multiple vendors in a common format

Benefits
Standardization in the industry
Reduced barriers to CRP adoption
Reduced P&G operations cost
Increased the base for P&G operations

Threats
There were no economic benefits for P&G by outsourcing

 IT can be a powerful tool when being combined with efficient

process re-engineering
-correct integration across organizations leads to efficiency
IT can be used to reduce the complexity of processes thereby
reducing the errors
-reduced manual works and no need so much of monitoring and
follow ups (No human buffering which can causes error )
-can focus on core competencies
Outsourcing a process to a giant may increase the chances of
adoption of the technology by masses
-will be commercially available whereby new suppliers and retailers
can take part
-many organizations in the supply chain can adapt the technology
and reducing cost

Difficulties In Direct Selling And

Indigenization
Database needs to be very
extensive
Difficult to acquire precise
information about people with
incontinences
Indigenization may reduce quality
will cause imitation products
Both may not provide the required
volume of business due to lack of
infrastructure and culture

Alternative Retail Channel

Modern supermarkets and
department stores
Target higher-middle and rich
classes
Perfect selling environment
privacy to consumer
Saving on wholesale margin
Organized retail is growing in cities
(Delhi, Mumbai)