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 .
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.
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.
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.
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