Supply chain priorities at P&G
Proctor & Gamble executive says his focus is on accurate forecasts, better visibility and responsiveness to change.
By Corinne Kator, Associate Editor -- Modern Materials Handling, 4/30/2007
At Proctor & Gamble the consumer is boss.
This philosophy drives everything the company does, including the way it manages its supply networks, says Keith Harrison, global product supply officer for P&G, who delivered a keynote address at the recent
Warehousing Education and Research Council conference in Nashville, Tenn.
This focus on the consumer, says Harrison, has led to three areas of emphasis at P&G:
1. Forecasting demand
2. Actionable visibility
3. Agility
Forecasting demand. Running a business based on forecasts, says Harrison, "is like trying to drive a car at 60 miles per hour while looking in the rear-view mirror."
Forecasts are inherently inaccurate, he says, and relying on them "leads to issues that can keep you awake not just for a night, but for a month."
But Harrison and his colleagues should be sleeping better soon. P&G is rolling out a new forecasting tool, he says, that is 30% more accurate than the company's previous method of predicting demand.
Actionable visibility. P&G wants the ability to see where its products are in the supply chain and to take action when something goes awry.
The most promising tool for providing this "actionable visibility," says Harrison, is an electronic product code (
EPC) stored on an
RFID tag.
In 1999, P&G helped to establish the Auto-ID Center at MIT, which later became
EPCglobal. According to Harrison, P&G believed then and still believes today in the power of RFID technology to transform supply chains.
Agility. To be successful in today's business climate, says Harrison, companies can't only compete on product and price. They also need to develop the ability to respond to an unpredictable world, whether that unpredictability is caused by the introduction of a new product category or by a
devastating hurricane.
This kind of flexibility and responsiveness, he says, requires leadership that looks for and embraces change.
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