South Carolina International Trade Conference May 30, 2007 SUPPLY CHAIN CAPABILITY and the “First...

South Carolina International

Trade Conference

May 30, 2007

SUPPLY SUPPLY CHAIN CHAIN CAPABILITYCAPABILITY

and theand the

““First Moment First Moment of Truth” of Truth”

AGENDAAGENDA P&G… Brief introduction

First Moment of Truth

Logistics affect on the FMOT

How P&G ensures logistics

excellence… and “wins” at

FMOT

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.

William Procter (1801-1884)

James Gamble (1803-1891)

IN THE BEGINNINGIN THE BEGINNING……

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

MAJOR ACQUISITIONS: 1957 – Charmin Paper 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 2005 - Gillette

But most But most of all… of all… we’re a we’re a

company company of Brandsof Brands

2121 - - BILLION $ BILLION $ BRANDSBRANDS……

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 TruthFirst Moment of Truth

WHAT IS THE FMOT?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!

What does “FMOT” mean toWhat does “FMOT” mean to logistics professionalslogistics professionals??

It’s what we do… move product at the right time/price/condition

Why is P&G successfulWhy is P&G successful?? Supply chain

coordination/collaboration

Innovation/technology

Logistics sourcing

Training

Coordination/Coordination/CollaborationCollaboration 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

“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

Innovation/Innovation/TechnologyTechnology

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

Logistics Logistics SourcingSourcing

TrainingTraining 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

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 TruthFirst Moment of Truth!

In Conclusion…In Conclusion…

                              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.

PURPOSEPURPOSE

1. Leadership2. Ownership3. Integrity4. Passion for winning5. Trust

1. Respect for all individuals2. Interest of P&G & employees are

inseparable3. Strategically focused4. Innovation is the cornerstone of success5. Externally focused6. Value personal mastery7. Seek to be the best8. Mutual interdependency is a way of life

VALUESVALUES

PRINCIPLESPRINCIPLES