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SUPPLY CHAIN CAPABILITY and the “First Moment of Truth”

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Presentation on theme: "SUPPLY CHAIN CAPABILITY and the “First Moment of Truth”"— Presentation transcript:

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      


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


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