3. INTRODUCTION
Founded in 1837, Procter & Gamble is the number
one U.S maker of household products and a
recognized leader in the
development, manufacturing and marketing of a
broad range of superior quality products
including crest tooth-
paste tide laundry detergent, ivory soap.
P & G was voted the “world „s most admired
company “for 14 years by fortune magazine .
P& G has operations in over 70 countries and
employs more than 100,000 people worldwide .
4. SITUATION
Procter & Gamble, a world leader in consumer goods , sells
nearly 300 brands in more than 160 countries. It has sales of $
40 billion a year .
P&G measures consumers satisfaction at two levels ,which it calls
the two” moments of truth “.the first moment of truth occurs
when the consumers reaches the shelf and finds that desired
product is not available. This is a critical moment, because if the
product is not available, the consumer usually moves on to buy a
rival product. the second moment of truth depends on buyers
satisfaction when consuming the product.
Top managers in P&G begun to realize that company s supply
network needed to be modified.
P&G decided that sophisticated demand chain management can
be the key to maintaining leading position.
5. DISCOVERIES
Out-Of- Stock cost you one sale in nine:
Though the consumer buys from the retailer, and
directly from the manufacturer cannot afford of
shortage at the store or shelf level.
I. At a time of highly volatile demand, out of
stock need to be monitored very closely.
II. P&G „s research has shown that retailers lose
11% of sales due to out of stock, and that same
brand substitutions win back 25% of those lost
sales.
6. Perfection can wait:
I. P&G has already discovered that effective
collaboration in non- linear supply chain
environments is a demanding discipline- and
that it is important to force the pace of change.
System and technologies may not yet be
ideal, but P&G has learned that it is not worth
waiting for perfection.
