1. SUPPLY CHAIN CAPABILITY and the “First Moment of Truth”
South Carolina International Trade Conference
May 30, 2007

2. AGENDA P&G… Brief introduction First Moment of Truth
Logistics affect on the FMOT
How P&G ensures logistics excellence… and “wins” at FMOT

3. IN THE BEGINNING…
William Procter ( )
James Gamble ( )
Two brothers-in-law… one made soap, the other candles.
Common raw material… tallow. Father-in-law suggested partnership.
April 12, 1837… William Procter & James Gamble formalized their business by pledging $3597 each.
                                       

4. P&G AT A GLANCE… ~$75,000,000,000 in sales $4B logistics spend
275,000+ TEUs
3500 lanes (~25% touch U.S.)
Over 500 whses… 45+MM sq. ft.
Selling in 160 countries, Mfg. in 90
135,000 employees

5. MAJOR ACQUISITIONS: 1957 – Charmin Paper 1991 – Max Factor
1967 – Folgers Coffee
1982 – Norwich Eaton
1985 – Richardson- Vicks
1989 – Noxell/Cover Girl
1990 – Old Spice
1991 – Max Factor
1991 – Max Factor
1994 – Giorgio Beverly Hills
1997 – Tambrands
1999 – Iams
2001 – Clairol
2003 – Wella
Gillette

6. But most of all… we’re a company of Brands
                                      
But most of all… we’re a company of Brands
                  
                  
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       

7. 21 - BILLION $ BRANDS…

8. Rather than talk external processes, I’ll focus on P&G’s attempt to ensure a successful end result… or what all people in P&G know as the…
First Moment of Truth

9. WHAT IS THE FMOT? Two “moments of truth”…
When the consumer BUYS.
When the consumer TRIES.
Need to “win” both
Logistics affects the 1st… giving an opportunity to win at the 2nd!

10. What does “FMOT” mean to logistics professionals?
It’s what we do… move product at the right time/price/condition
Why is P&G successful?
Supply chain coordination/collaboration
Innovation/technology
Logistics sourcing
Training
This is the common 10 point selection criteria used within the U.S. in the choosing of 3PLs. The 10th point (MBEs) is U.S.-centric. The other points can be used in any region.
The importance placed on each of these is dependent on the situation, geography, needs, available suppliers, etc.

11. Coordination/Collaboration
Matrix organization
GBUs, MDOs, GBS, Corp. Functions
Horizontal Process Networks
End-to-End supply chain management
Total delivered costs… raw material to shelf
Business continuity planning

12. Innovation/Technology
“CarrierConnect”
Internal development/external acquisition… shipment forecasting, scheduling, routing guide compliance, tracking/tracing, etc.
Distribution Center/Warehouse technology
Picking, automation, contract innovation, etc.
Other cross-border applications
Container GPS, duties, free trade agreements, etc.
Global order management platform
Global Analytics
Externally Linked Solutions
Draw on supplier capabilities & explore alternatives

13. Logistics Sourcing Supplier relationship management
Not done casually or quickly
Takes resources, time, commitment
Principles, Values, Purpose
Best total value
“Fits” (strategic, operational, chemistry) *
Selection technology
* Logistics Outsourcing, A Management Guide Clifford F. Lynch

14. Training Hire at entry level and promote from within
Critical focus on training & development
Internal “colleges”, external opportunities
Formal qualification for advancement
Centers of Expertise
“Success Drivers”
Purpose/Values/Principles
Success of P&G and employees is inseparable
Relationships don’t happen over-night…
Relationships won’t continue if there is not some mutual advantage for them…
Building a truly good relationship with a 3PL, or an individual, takes time and effort
“Fits” are covered on the next slide…

15. In Conclusion…
P&G’s “Wall Street” commitments, require bottom line growth of $4B-$5B/yr.
Most don’t initially think of successful logistics as a requirement for this.
But the power of doing logistics right… the first time… is recognized & rewarded in P&G.
Systems/processes are in place to ensure we move cargo to the shelf with excellence… to win at the First Moment of Truth!

17. PURPOSE
   
                              We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.

18. VALUES PRINCIPLES Leadership Ownership Integrity Passion for winning
Trust
Respect for all individuals
Interest of P&G & employees are inseparable
Strategically focused
Innovation is the cornerstone of success
Externally focused
Value personal mastery
Seek to be the best
Mutual interdependency is a way of life
VALUES
PRINCIPLES