{"id":19266,"date":"2016-11-18T16:48:31","date_gmt":"2016-11-18T21:48:31","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/turning-insights-to-action-how-pg-plans-to-win-in-the-digital-age\/"},"modified":"2016-11-18T16:48:31","modified_gmt":"2016-11-18T21:48:31","slug":"pg-bringing-cpg-into-the-digital-age","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/pg-bringing-cpg-into-the-digital-age\/","title":{"rendered":"P&amp;G: Bringing CPG into the Digital Age"},"content":{"rendered":"<p>Tide, Crest, Bounty, Charmin, Pampers, Always, Dawn, Olay and Oral-B. You know these brands, you probably use these brands, but what do they have in common? They are just 9 of 21 brands that sell over 1 billion dollars in sales,<sup>1<\/sup> and are all owned by the largest consumer packaged goods manufacturer in the world, Procter &amp; Gamble (P&amp;G).<\/p>\n<p>P&amp;G\u2019s mission is to \u201cprovide branded products and services of superior quality and value that improve the lives of the world\u2019s consumers\u201d<sup>2<\/sup> Since 1837, P&amp;G has been delivering on this promise, but in March of 2000, that came to a halt when P&amp;G\u2019s stock plunged by 30% ($36 billion)<sup>3<\/sup> followed by the CEO, Durk Jager, resigning in June<sup>4<\/sup>. These drastic changes forced the company to reevaluate its priorities and really think about who it wanted to be in the changing landscape. One of the biggest mandates that came out of this period was to create an operating model that focused on innovation, but to do that, they first needed to understand their current position, and for that, they needed data.<\/p>\n<p>Under former CEO, Robert McDonald, P&amp;G created an agenda to \u201cdigitize\u201d the company\u2019s processes from end to end and make data more accessible to its decision makers. Out of this agenda came the Business Sufficiency analytical model, the Decision Cockpits, and Business Spheres, all which combine to create a visually immersive data environment that transforms decision making at P&amp;G by harnessing real time business information from around the globe.<\/p>\n<ul>\n<li>Business sufficiency analytics is a visual, exception based model, built on SAS analytics software and delivered through dashboards (Decision Cockpits), that gives executives predictions about P&amp;G\u2019s market share and other performance statistics six to 12 months in advance. Using a series of analytical models, P&amp;G can determine what\u2019s happening in the business now, why it\u2019s happening and what actions they can take. The Business Cockpits enables more than 50,000 employees access to this drillable data on their desktops.<sup>5<\/sup><\/li>\n<\/ul>\n<figure id=\"attachment_18987\" aria-describedby=\"caption-attachment-18987\" style=\"width: 440px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-18987\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1-300x223.png\" alt=\"http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/\" width=\"440\" height=\"327\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1-300x223.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1-768x570.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1-600x446.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-1.png 878w\" sizes=\"auto, (max-width: 440px) 100vw, 440px\" \/><\/a><figcaption id=\"caption-attachment-18987\" class=\"wp-caption-text\">http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<ul>\n<li>Business Spheres are meeting rooms with football shaped tables that allow leaders to \u2018see\u2019 the data from the Business Sufficiency Analytics and Decision Cockpits by projecting six dashboards across two 30-foot wide projection screens. The dashboards analyze and connect up to 200 terabytes of data which allows it unprecedented granularity and customization.<sup>6<\/sup><\/li>\n<\/ul>\n<figure id=\"attachment_18996\" aria-describedby=\"caption-attachment-18996\" style=\"width: 440px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-2.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-18996\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-2-300x200.png\" alt=\"http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/\" width=\"440\" height=\"293\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-2-300x200.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-2-600x399.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/DFigure-2.png 757w\" sizes=\"auto, (max-width: 440px) 100vw, 440px\" \/><\/a><figcaption id=\"caption-attachment-18996\" class=\"wp-caption-text\">http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/<\/figcaption><\/figure>\n<p>In addition, before the digital revolution, creating prototypes for their products cost thousands of dollars and were made by hand. Today, however, P&amp;G uses modeling and simulations, and can test thousands of iterations in seconds.<sup> 7<\/sup><\/p>\n<p>P&amp;G has even gone so far as digitizing \u201cthe creation of molecules\u201d. When researching and developing a new dishwashing liquid, they used modeling to \u201cpredict how moisture would excite various fragrance molecules so that throughout the dishwashing process, you get the right fragrance notes at the right time\u201d.<sup>7<\/sup><\/p>\n<p>According to former CIO, Brian P. Watson, the end result of digitizing the company end to end is to \u201c[create] an environment that is functioning in real time.\u201d By doing this, P&amp;G can respond to the market faster than before and make better, more-informed decisions to address the needs of their customers and consumers\u201d.<sup>8<\/sup><\/p>\n<p>In this digital world, speed and flexibility will become paramount, but what else should P&amp;G be doing to not only survive, but flourish in this new landscape? While P&amp;G\u2019s data and analytics is great, it means nothing if they can\u2019t translate it to sales. In 2016, Amazon announced that it will begin offering its own private label groceries including coffee and baby food. While Amazon tried (and failed) to sell diapers in 2015<sup>9<\/sup>, it is only a matter of time before they begin to outsource its private label to a 3<sup>rd<\/sup> party and sell it as their own. With consumer spending continuing to shift online, this poses a real threat to P&amp;G who typically sells less than 1% of their global revenue online.<sup>10 <\/sup>For P&amp;G to keep up with this digital age, they must harness the power of their data to better understand their customer\u2019s latent needs and create innovate products and brands in categories that don\u2019t yet exist. However, with their high commercial success rate and their drive to digitize their processes, I have no doubt that this 179 year-old company will continue to innovate and succeed. \u00a0(Word count: 797)<\/p>\n<p>&nbsp;<\/p>\n<p>[1] <em>P&amp;G: Our Core Strengths<\/em>. From P&amp;G website, <a href=\"http:\/\/us.pg.com\/who-we-are\/our-approach\/core-strengths\">http:\/\/us.pg.com\/who-we-are\/our-approach\/core-strengths<\/a>, accessed November 2016<\/p>\n<p>[2] <em>P&amp;G: Our Purpose, Values and Principles<\/em>. From P&amp;G website, \u00a0<a href=\"https:\/\/www.pg.com\/translations\/pvp_pdf\/english_PVP.pdf\">https:\/\/www.pg.com\/translations\/pvp_pdf\/english_PVP.pdf<\/a>, accessed November 2016<\/p>\n<p>[3] Matthews, Steve, \u201cP&amp;G Stock Sinks 30% to 3-Year Low,\u201d Los Angeles Times, March 8 2000, <a href=\"http:\/\/articles.latimes.com\/2000\/mar\/08\/business\/fi-6496\">http:\/\/articles.latimes.com\/2000\/mar\/08\/business\/fi-6496<\/a>, accessed November 2016<\/p>\n<p>[4] \u201cP&amp;G CEO quits amid woes,\u201d June 8 2000, CNN Money, <a href=\"http:\/\/money.cnn.com\/2000\/06\/08\/companies\/procter\/\">http:\/\/money.cnn.com\/2000\/06\/08\/companies\/procter\/<\/a>, accessed November 2016<\/p>\n<p>[5] \u201cP&amp;G turns analysis into action,\u201d September 19 2011, InformationWeek, <a href=\"http:\/\/spotfire.tibco.com\/assets\/bltf3f73e8160d9ba3e\/p-g-information-week.pdf\">http:\/\/spotfire.tibco.com\/assets\/bltf3f73e8160d9ba3e\/p-g-information-week.pdf<\/a>, accessed November 2016<\/p>\n<p>[6] Choudhury, Shilpi, \u201cHow P&amp;G uses Data Visualization to uncover new opportunities for growth?,\u201d April 16 2014, Fusion Brew, <a href=\"http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/\">http:\/\/www.fusioncharts.com\/blog\/2014\/04\/how-pg-uses-data-visualization-to-uncover-new-opportunities-for-growth\/<\/a>, accessed November 2016<\/p>\n<p>[7] \u201cInside P&amp;G\u2019s digital revolution\u201d, November 2011, McKinsey Quarterly, <a href=\"http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/inside-p-and-ampgs-digital-revolution\">http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/inside-p-and-ampgs-digital-revolution<\/a>, accessed November 2016<\/p>\n<p>[8] Watson, Brian P., \u201cData Wrangling: How Procter and Gamble Maximizes Business,\u201d January 30 2012, CIO Insight, <a href=\"http:\/\/www.cioinsight.com\/c\/a\/Business-Intelligence\/Data-Wrangling-How-PG-Maximizes-Business-Analytics-782673\">http:\/\/www.cioinsight.com\/c\/a\/Business-Intelligence\/Data-Wrangling-How-PG-Maximizes-Business-Analytics-782673<\/a>, accessed November 2016<\/p>\n<p>[9] Del Rey, Jason, \u201cAmazon Pulls Its Line of Diapers Less Than Two Months After Launch,\u201d January 21 2015, Recode, <a href=\"http:\/\/www.recode.net\/2015\/1\/21\/11557948\/amazon-pulls-its-line-of-diapers-less-than-two-months-after-launch\">http:\/\/www.recode.net\/2015\/1\/21\/11557948\/amazon-pulls-its-line-of-diapers-less-than-two-months-after-launch<\/a>, accessed November 2015<\/p>\n<p>[10] McMains, Andrew, \u201cSales Are Not the Main Goal for P&amp;G&#8217;s New Online Store,\u201d February 7 2010, Adweek, <a href=\"http:\/\/www.adweek.com\/news\/advertising-branding\/sales-are-not-main-goal-pgs-new-online-store-107024\">http:\/\/www.adweek.com\/news\/advertising-branding\/sales-are-not-main-goal-pgs-new-online-store-107024<\/a>, accessed November 2016<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How P&amp;G&#8217;s use of data is transforming the way it goes to market<\/p>\n","protected":false},"author":2585,"featured_media":19267,"comment_status":"open","ping_status":"closed","template":"","categories":[298,430,60,788,2618,2709,16,55],"class_list":["post-19266","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-big-data","category-cpg","category-data","category-digital","category-digital-age","category-pg","category-retail","category-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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