2. One of the largest manufacturers
supplying grocery to retailers and
wholesalers
Leader in designing how branded
consumer-goods go to market
Strong customer pull for P&G’s products
Products were sold through multiple
channels, with grocery retailers,
wholesalers, mass merchandisers, and
club stores
3. 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
4. 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
5. The retailer provide 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 retailer's warehouse
inventory to acceptable levels, eliminate
costly LTL shipments, and reduce stock
outs
6. 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 reengineering
It enabled transfer or large amount of error
free data between companies
7. 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
8. Rewrote the entire ordering, shipping, and
billing (OSB) system
The OSB system supported pricing, ordering,
shipping, invoicing, and separate credit
systems
The OSB integrated 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
9. 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
10. Benefits
• Standardization of the process
• Automation
• Reduction of complexity
• Reduction in error
• Reduction in the cost of the processes
Threats
• Resistance to change
• Time and cost of implementation
11. 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
12. 1993 - P&G sold CRP system to IBM's
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
13. Benefits
• Standardization in the industry
• Reduced barriers to CRP adoption
• Reduced P&G’s cost of operation
• Increased the base for P&G’s operations
Threats
• There were no economic benefits for P&G by
outsourcing
14. IT can be a powerful tool when combined
with efficient process reengineering
IT can be used to reduce the complexity of
processes thereby reducing the errors
Outsourcing a process to a giant may
increase the chances of adoption of the
technology by masses