Success Stories Procter & Gamble
ALWAYS ONE STEP AHEADGlobal consumer products company Procter&Gamble (P&G) is an innovation leader in the rapidly changing consumer retail industry. With the help of SAP, P&G has built a highly advanced supply chain, moved closer to its customers, and enhanced its ability to absorb acquisitions. As a result, the company drives growth and innovation in every aspect of its business – and maintains a strong competitive advantage.
More than 300 P&G brands are household names throughout the world. In fact, 22 of its beauty, grooming, and household care products boast annual sales of US$1 billion or more. P&G is also a pioneer in leveraging global enterprise resource planning (ERP) and a long-time SAP customer. The company began making country-specific purchases of SAP R/2 in Europe and Latin America as early as 1988. By 1997, the company had already begun a global SAP rollout, resulting in one of the first worldwide, standardized IT systems. And in 2006, P&G again led consumer packaged goods companies with its commitment to move toward enterprise service-oriented architecture (enterprise SOA) with a global upgrade to SAP ERP 2005. Since then, the company has focused on optimizing its overall supply chain, leveraging SAP’s market-leading supply chain management and planning applications. These solutions – as well as P&G’s long-term strategic partnership with SAP – have helped the global leader strengthen every aspect of its value chain.
BUILDING A SUPPLY CHAIN THAT RESPONDS IN REAL TIME
Supply chain management is a key focus for manufacturing companies today, particularly those in the highly competitive consumer goods space. P&G has taken the practice one step further by building an adaptive supply network – a demand-driven supply chain capable of analyzing streams of real-time data and automatically producing highly accurate forecasts at any given moment. P&G uses this information to make better purchasing decisions; to fine-tune sales and marketing efforts; and to ensure that each of its hundreds of products are in stock on store shelves.
Operating with this kind of precision has become a necessity for a consumer products company like P&G, which finds itself competing in an increasingly difficult retail environment. Margins have become thinner and growth much more difficult to achieve. The balance of power has shifted decisively to retailers and continues to move toward the consumer, who has become less loyal and more willing to try new brands. When a branded product is out of stock, consumers will often simply switch to another product, regardless of the brand’s strength.
“Staying the same will not work. The supply chain can hold your business model back, or propel you ahead,” says P&G CEO AG Lafley. “SAP allows us to get more in tune with the dynamics of the supply chain, with our consumers and with our customers.”
Always in stock: SAP helps keep P&G’s
more than 300 quality brands on stores
helves throughout the world.