{"id":23654,"date":"2017-11-15T18:43:15","date_gmt":"2017-11-15T23:43:15","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-digital-transformation-of-cpg-supply-chain\/"},"modified":"2017-11-15T21:40:47","modified_gmt":"2017-11-16T02:40:47","slug":"pg-end-to-end-supply-chain-model","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/pg-end-to-end-supply-chain-model\/","title":{"rendered":"P&G: End-to-end Supply Chain Model"},"content":{"rendered":"

Emerging Digital Business Models<\/strong><\/p>\n

The past 30 years have been a massive change in P&G’s supply chain operations. Without a doubt, digital technology is being one of the biggest drivers of such transformation. According to Supply Chain 4.0 in Consumer Goods, the focus of the supply chain management role has altered to \u201cadvanced planning processes\u201d based more on the actual demand from end consumers enabled by digital analytical forecasting and integrating operations planning. [1] Such demand-driven model, in which sensing and responding to demand as quickly as possible, requires manufactures to reconsider its production to shipment network design. In order to meet such demand, P&G integrated data-driven production flow of operations that significantly improved responsiveness as well as transparency. [2] As a result, the digital pieces of the supply chain that used to be discrete individual steps now become more holistic, real-time management of the entire ecosystem. [3]<\/p>\n

\"\"<\/a><\/p>\n

End-to-end Supply Chain \u2013 From Factory to Shelf <\/strong><\/p>\n

P&G has leveraged large-scale application of advanced analytics and digital technology to excel in its ability to manage complicated global supply chain with more than 130 manufacturing sites serving over 180 countries. One of the key drivers is an \u201cend-to-end model\u201d that connected the siloed steps from suppliers to retailers to provide the most value to the end consumers, \u201cwith faster-than-ever response times\u201d [2]. The concept of integrating the whole value chain allow every stakeholders of its eco chain to minimize the unnecessary inventory as well as to speed up the system.<\/p>\n

P&G integrates its supply chain software with its suppliers, distributors and retailers with a notion of joint business planning with key stakeholders. [4]. To fully integrate different parts of the chain, understanding that digital automation of workflows that allows high visibility of any movement in each step is a key to enable end-to-end model. Digital automation of workflows empowered by use of algorithm-driven tools to reduce exceptions, enables end-to-end planning, connecting headquarters, manufacturing plants, distributor, and retailers. [2]<\/p>\n

One highlight in logistics capability, called \u201cDistributor Connect\u201d connects P&G with distributors. [5] Digitally enabled operational program, it allows all the transportation, from raw materials from suppliers to finished goods to retailers, be accessible in one source of data, on their laptop or mobile, for the supply managers to track the status of the delivery. With enhanced real time visibility of where things move, Distributor Connect significantly reduces inventory across the ecosystem and the \u2018deadhead,\u2019 trucks not optimally utilized, by about 15%. [3]<\/p>\n

Similarly, not only does P&G support with mobile-phone applications that enable retailers to check the status and order more products, it fully incorporates \u201cGDSN,\u201d Global Data Synchronization Network with the operation with retailers. GDSN enables 100% automated commerce without human intervention. [6] This capability significantly improves the human error between retailers and companies and save cost for all the parties.<\/p>\n

Leaping for the next step to enable R&D Lab to Shelf <\/strong><\/p>\n

These \u2018end-to-end\u2019 approach, enabled by digital capabilities, allow the company to accelerate the time to deliver its products to the market. However, the implications of rising digitalization trend do not just start from manufacturing. It goes back into product innovation. [8] If we look at different industries, for example apparel industries, digital landscape has pushed each brand to take advantage of latest technology such as AI to realize real-time personalization. \u00a0\u00a0[7]<\/p>\n

To truly accelerate the cycle of innovation, the company should consider the following:<\/p>\n