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Bringing the Voice of the Consumer Into Your Supply Chain Jake Barr Director, Consumer Driven Supply Network Global Mfg, Planning & Logistics The Procter.

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Presentation on theme: "Bringing the Voice of the Consumer Into Your Supply Chain Jake Barr Director, Consumer Driven Supply Network Global Mfg, Planning & Logistics The Procter."— Presentation transcript:

1 Bringing the Voice of the Consumer Into Your Supply Chain Jake Barr Director, Consumer Driven Supply Network Global Mfg, Planning & Logistics The Procter & Gamble Company

2 2 1 3 agenda About P&G The Consumer is Boss 4 5 Why Change What is Consumer focused Supply Network How to Change Understanding What to Design & How 6

3 1 about P&G

4 P&G + Gillette = 22 Billion-Dollar Brands

5 5 $67.9 billion sales* 140,000 employees More than 140 manufacturing facilities in more than 80 countries More than 25 R&D centers in 12 countries Unique organization structure P&G Today *Unaudited proforma condensed combined financial results of P&G and Gillette

6 2 consumer is boss

7 Two Moments of Truth When they choose……and when they use

8 Winning at the First Moment of Truth The need for a consumer-driven supply network

9 3 why change?

10 10 Consumer is Boss Innovation Value Shelf presence Customization In-store experience Ever-increasing expectations

11 Retailers are Changing To meet the needs of today’s consumers Industry consolidation Importance of free cash flow Growth of private labels Focus on margins Seeking to be unique Seeking to offer solutions Operational excellence

12 Challenges in the End-to-End Supply Chain Agility Speed to market Unique challenges of developing and developed markets Scale Ongoing effort to reduce time and costs in order to create value for our business Differentiation Unique needs of large, global retailers vs. small, local high-frequency stores Today’s supply networks aren’t fast/flexible enough Demand for affordability and value

13 4 what is CDSN

14 Internal cost Reliability and flexibility Creating value with retail customers and consumers to drive business growth Supply Chain Evolution

15 Reliable service Agile, demand-driven supply Affordable differentiation capabilities

16 Reliable Service Externally focused measures: Right product Right place Right time Right quality Right price/value

17 Agile, Demand- Driven Supply Reducing end-to-end supply network time Producing to demand Increasing service and reliability at a lower working capital investment Accelerating speed-to-shelf for new product innovations Information replaces inventory

18 Shopper understanding – a common starting point Customer understanding – existing and emerging needs (e.g., shelf-ready packaging) Supply solutions Late-stage differentiation Flexible manufacturing Affordable Differentiation

19 5 how to change

20 Change the Culture External Focus

21 Becoming Externally Focused Understand how the supply network performs from the shopper and retailer perspective Remove barriers between supply community and commercial/sales (e.g., rewards) Create awareness of customer needs into company/category management SC leaders need to talk the business language (e.g., growing the business)

22 Change the Relationship with Customers Full Collaboration

23 Build Internal Capability External focus: culture/measure change Operational excellence: service and availability Synchronization: information replaces inventory Shelf-back design Agility: take time and cost out of the system Flexibility: customer and consumer driven differentiation

24 Produce To Demand Continuum Produce Every SKU Every Month Customer POS Replenishment Produce To Replenish Customer DC Inventory Withdrawal Produce To Order Today, Ship Tomorrow/Today Produce to Replenish Inventory Produce Every SKU Every 2-wks Today’s Operation Shorten Cycles < 3 Days Produce Every SKU Every Week Production Triggered By FORECASTS Production Triggered By KNOWN DEMAND Orders, Customer Inventory Levels, POS FOCUS: Improve Reliability/ Capability Reduce Inventory Levels FOCUS: Supply Chain Synchronization Supply Chain Integration LEAN AGILITY  2002 The Procter & Gamble Company, All Rights Reserved.

25 What about the Initiative process? Reinventing the supply network Shelf back based product design to win at the shelf Short cycle consumer/retailer learning Answering question of what innovation rhythm is required to win Source of new ideas > 50% Connect & Develop Supply Design integrated from the beginning Supply Chain Time

26 So … where would you start? Reinventing the supply network

27 Quick Changeover Standardized Demand/Supply Processes Batch Reduction Standard Master Data – Run to MRP Measures (Reliable data, predictable production & supply) Quality at Source Supplier Integration Value Stream Mapping Event Visibility Distribution Response Time Demand Integration TPM/Loss Elimination Demand Journey BUILDING BLOCKS TO CONSIDER

28 Do You know what The Business Model Requires for a SN Design?

29 6 How to Design

30 SN Performance Gaps 4. Strategic Design Supply Network Requirements Demand Strategy Initiative Strategy Material Supply Strategy Material Sourcing Strategy Capacity Strategy Planning Strategy Production Sourcing Strategy Distribution Strategy Inventory Strategy Information Strategy Business Needs 1. Business Strategy 5. Structural Design Strategic Direction 2. Strategy Engagement Supply Network Structure Supplier Selection CBA Siting / Sourcing Outsourcing CBA Distribution/Replenishment Choice Structuring Price Driven Economics Options Analysis Business Strategy Industry, Technology Trends Operating Strategy CBA Simulation Mapping Demand Analysis Production Strategies Inventory Policy Brand Equity GBU & MDO Plans Why? What? Where? 3. Gap Analysis High-Level Mapping Scorecards Key Performance Measures 7. Deploy & Monitor Scorecards Supply Network Design Process How? 6. Operational Design Value in Supply Chain Sourcing Strategy Organization Focus  2006 The Procter & Gamble Company, All Rights Reserved.

31 Questions?

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