Wal-Mart - Procter & Gamble Sou  h Group David DrendelErik Peterson Tom Heil James Douglass

Issues 1988 Wal-Mart / P&G relationship was broken P&G - 12 different product divisions Different sales manager for each division The divisions never worked with each other In 1985 – Sam W tried to award the vendor of the year award to P&G, but never got through Can two companies work together, share information and both become more profitable?

Wal-Mart - Procter & Gamble Before Channel partnership Adversarial relationship: Wal-Mart did not like doing business with P&G Transactional focus – day to day selling, ignored customer wants Fragmented processes – relationship was defined by buying and selling only. P&G Wal-Mart P&GWal-Mart Before After

Wal-Mart Data P&G Data Data delivery Highway Category Analysis Shelf Mgt.MarketingProfitability Data sharing Replenish- ment Activity based costing Marketing analysis The data highway for the Manufacturing/Retailing Integration How Did They Do It?

Joint score cardReporting sale of P&G products at Walmart, margin and profit resuslts, inventory turns, financial logistic measurement-> allow partnership to focus on the end customer and used combined data to measure joint progress Replenishment (CRP)P&G replenished Walmart ’ s inventory based on inventory data received from Walmart ’ s distribution center

How Did They Do It? EDIElectronic transmission of purchasing orders, invoices, advanced shipment notification, financial payment Customer table checking PG linked into Wal-Mart ’ s item file of PG products and compared them to the pricing and product specifications in PG ’ s item file-> good purchase order-invoice match rate Category management Providing insight into consumer trends and a perspective on growing consumer needs

Impact of New Processes Changes in company cultures Sales growth $375M to over $4,000M Each increased profitability Reduction of inventories Improved information flow Increased knowledge of consumers Identification of “slow movers”

Continuous Replenishment Process Information sharing between manufacturer and retailer Use of inventory data to manage shipments Reduction of inventory Reduction in order cycle time P&G uses CRP through the following: Actual warehouse on-hand and on-order quantities and the projected store sales data

Supply Chains "A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distirbution of these finished products to customers." From Ganeshan and Harrison, Supply Chain Management Supply-chain management is a generic term that encompasses the coordination of order generation, order taking, and offer fulfillment/distribution of products, services, or information

Collaborative SCM SCM – Supply Chain Management Types of Collaboration Vertical collaboration Horizontal collaboration Customer Retailer Distributor Manufacturer Supplier Customer Retailer Distributor Manufacturer Supplier Horizontal Vertical Retailer

Collaboration Situations

Collaboration, Planning, Forecast, Replenishment Collaboration agreement Joint business plan Sales forecast Exceptions to forecast Resolve exceptions Order forecast Exceptions to order Resolve exceptions Generate order CPFR – website 9 step process model

P & G Today What we do: As a member of P&G's IT community, you will join a global team of IT specialists who play a leading role in multi functional business teams worldwide. You will have the opportunity to work across a wide range of business areas, doing projects covering many crucial disciplines; including business re-engineering, Business to Business collaboration (B2B), Business to Consumer relationship management (B2C / CRM), global SAP implementation, knowledge management and business analysis. We'll provide you with a strong training program to enable you to succeed and you'll have daily access to coaching and mentoring from experienced colleagues. Transora.com From raw material to store shelf, our aim is to free companies from reactive inventory practices and allow them to focus on strategic activities that drive market performance.

Wal-Mart Today Goal – sell products before invoice is paid to suppliers P&G items Product in Wal-Mart warehouse - < 8 hours Ships to store and on shelf - < 4hours Sold to consumer - < 24 hours

Power of Wal-Mart Power over suppliers - Mars, Inc 3 separate divisions that owners wanted to keep separate Wal-Mart demanded that Mars must have one sales manager for all brands Mars, Inc created Masterfoods USA a division of Mars, Inc M&M/Mars, KalKan, Uncle Bens Sales office in Bentonville, AR