The Procter & Gamble Company, also known as P&G, is an American multinational consumer goods

company headquartered in downtown Cincinnati, Ohio, United States. Its products include pet foods,
cleaning agents, and personal care products. Prior to the sale of Pringles to Kellogg Company, its product
line included foods and beverages. It appears in the global, publicly traded Fortune 500 Company, and
the largest consumer packaged Goods Company in the world.
HQ: Cincinnati, OH
Operations in: About 75 countries
Sales: $83.7 Billion (FY 2012)
Established: 1837

History
WILLIAM PROCTER, a candle maker, and JAMES GAMBLE, a soap maker, emigrated from England and
Ireland respectively. They settled in Cincinnati initially and met when they married sisters, Olivia and
Elizabeth Norris. Alexander Norris, their father-in-law, called a meeting in which he persuaded his new
sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter &
Gamble was created.

Organizational structure
The organizational structure is comprised of Global Business Units (GBUs), Global Operations, Global
Business Services (GBS) and Corporate Functions (CF).

Executive Team
AG Lafley
Chairman of the Board, President and Chief Executive Officer
Lafley previously served as P&Gs President & CEO from 2000 to 2009. During this time, the Company
more than doubled sales and grew its portfolio of billion-dollar brands from 10 to 23.
Dimitri Panayotopoulos
Vice Chairman, Global Business Units
Dimitri, a global business leader with vast international experience, is Vice Chairman of Procter &
Gamble Global Business Units.

Werner Geissler
Vice Chairman, Global Operations
Werner oversees business operations around the world including P&G offices in approximately 75
countries, and a network of 500+ distributors to serve over 4 million retail outlets every month.


GLOBAL BRANDS

P&G touches and improves the lives of about 4.4 billion people around the world with its portfolio of
trusted, quality brands. There are 50 leadership brands worldwide which are some of the worlds most
well-known household names.24 of these 50 brands each generate more than one billion dollars in
annual sales. These 50 brands represent 90% of P&G sales and more than 90% of profits. The Company's
leadership brands include Pampers, Tide, Ariel, Always, Whisper, Pantene,Mach3, Bounty,
Dawn, Fairy, Gain, Pringles, Charmin, Downy, Lenor, Iams, Crest, Oral-B, Duracell, Olay
,Head & Shoulders, Wella, Gillette, Braun, Fusion, Ace, Febreze, and Ambi Pur. With
operations in about 80 countries, P&G brands are available in more than 180 countries worldwide



PNG INDIA




The Indian market has plethora of P&G brands satisfying the varied and multi-cultural needs of the
Indian people. Established in 1964, P&G India now serves over 650 million consumers across India. Its
presence pans across the Beauty & Grooming segment, the Household Care segment as well as the
Health & Well Being segment, with trusted brands that are household names across India. These include
Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head & Shoulders, Wella
and Duracell. Superior product propositions and technological innovations have enabled P&G to achieve
market leadership in a majority of categories it is present in. P&G India is committed to sustainable
growth in India, and is currently invested in the country via its five plants and over nine contract
manufacturing sites, as well as through the 26,000 jobs it creates directly and indirectly. P&G operates
under three entities in India - two listed entities Procter & Gamble Hygiene and Health Care Limited
and Gillette India Limited, as well as one 100% subsidiary of the parent company in the U.S. called
Procter & Gamble Home Products.

BUSINESS SEGMENTS
The company structure is categorized into two "Global Business Units" with each one further divided
into "Business Segments" according to the company's 2011 Annual Report


SUPPLY CHAIN
Bull whip effect
The concept emerged when the logistics executives at Procter & Gamble (P&G) examined the order
patterns for one of their best-selling products Pampers. Its sales at retail stores were fluctuating, but the
variability was certainly not excessive. However, as they examined the distributors orders, the
executives were surprised by the degree of variability. When they looked at P&Gs orders of materials to
their suppliers, such as 3M, they discovered that the swings were even greater. At first glance, the
variability did not make sense. While the consumers, in this case, the babies, consumed diapers at a
steady rate, the demand order variability in the supply chain were amplified as they moved up the
supply chain. P&G called this phenomenon the "bullwhip" effect.
CPFR (collaborative Planning Forecasting and Replenishment)
pre scenario - Bullwhip Effect
Causes
Separate demand forecast done by players in supply chain.
Price fluctuations manufacturers and distributors periodically have special promotions like price
discounts, quantity discounts, coupons, rebates, and so on.
Players in supply chain after receiving order accumulates demands (Order Batching) before
issuing an order.
No communication and sharing of data between players in the chain

CPFR (collaborative Planning Forecasting and Replenishment) -Procter & Gambles CPFR focus is to
build on the current success of the Continuous Replenishment Program (CRP). CRP has delivered greater
than 99% service levels, and has reduced customer distribution center inventories by as much as 50% in
customers representing over 40% of U.S. and European businesses. P&G has deployed CPFR to enable
creation and integration of consumer demand data. This will trigger product flow from our
manufacturing plants to our customers DCs, from the customers DCs to their retail store shelves, and
ultimately from the store shelves into consumer homes.


It is a nine-step process model consisting of
Developing collaboration agreement
Creating joint business plan
Creating sales forecast
Identifying exceptions for sales forecast
Resolving collaborating on exception items

Resolving / collaborating on exception items
Generating orders
Primarily CPFR output concentrates on improving inventory and reducing out-of-stocks. Since both the
objectives are inversely proportional; trade-offs must be made. CPFR recognizes that the main causes of
these two issues are identical:
1. Ineffective trust-based collaboration.
2. Ineffective planning using visibility of POS consumer demand.
3. Ineffective forecasting.
4. Ineffective product replenishment in response to demand fluctuations.


Procter & Gamble has put in place pilot programs that reach across product categories--including
laundry, shampoo, beauty, and paper products--and involve retail partners such as Kmart, Target, and
Wal-Mart in the United States, and Dansk, Sainsbury, and Tesco in Europe.
Challenges faced by P&G in Implementing CPFR
Selection of CPFR Partners
P&G and Wal-Mart assess the potential relationship according to anticipated, realistic benefits,
pertinent to common business goals, organizational and cultural issues.
Trust Based Relationship
CPFR involves sharing sensitive information. To take full advantage of the benefits of CPFR, P&G and
Walmart created a relationship founded on trust. Sharing sensitive data and close collaboration
demands reliability.
' Detailed Definition of Systems Capabilities
For the success of CPFR it is key to collaborate at the same data level. In particular, best practice would
be to collaborate at the lowest data level; sharing promotional plans, forecasts and replenishment
orders per trading unit and per point of sales.
Senior Management buy in
Senior management of P&G made sure that the necessary resources (Human Resources, Technical
Infrastructure, Time and Project Budget) are prioritized and dedicated to the project.
BENEFITS OF CPFR
Improved responsiveness to consumer demand
The reduction of out-of-stocks and shorter cycle times leads to a more responsive and reliable supply
chain for P&G, thereby improving on-shelf availability and increasing consumer satisfaction. Through
CPFR P&G reduced replenishment time by 20%.
Greater forecast accuracy with single shared forecast
Sharing a single forecast along the supply chain enables P&G to benefit from potential synergies and
brings together trading partners efforts. Depending on their position in the supply chain and supply
chain activities, trading partners may have different views of the market and information. Combining
this knowledge is the foundation for greater forecast accuracy. Through CPFR forecast accuracy
improved by 20%.
Increase in sales
Collaboration on planning and forecasting potentially reduces out-of-stocks, lost sales and increases on-
shelf availability which leads to increase in sale of P&G.
Cost reduction
P&G has aligned the production schedule with the agreed forecast, so costs has been reduced by
decreasing set-up times, effort duplications and variations.
Improved relationship between the trading partners
The relationship between P&G, wall mart has improved when collaboration takes place. Trading
partners will gain a better understanding of their respective businesses by regularly exchanging
information and establishing direct communication channels.
Inventory reduction
Increased forecast accuracy facilitates a decrease in the safety stock, reducing inventory levels and
increasing on-shelf availability. Thus the inventory cost for P&G has reduced.
CDSN (Customer driven supply network)
P&G believes in 2 moments of truth. First, when customer buys the product from shelf. Second, when
they actually use it and like it. In order to handle the first moment of truth, it is important to have stocks
available on shelf. P&G realized that 48% of times their products were unavailable on the shelf when the
customers wanted it. They were losing a large quantum of sales and hence needed to take corrective
action.
P&G redefined its supply chain strategy under the leadership of Keith Harrison Head of Global Product
Supply Division. P&G decided to have a connection between actual sales and the supply chain process.
Paradigm shift in viewing supply chain management from forecast driven to actual demand driven.
Supply Network instead of a supply chain because of information flow in all directions.
P&G started its supply chain from store shelves and moved back to its suppliers. This operating strategy
was called Consumer Driven Supply Network. CDSN required P&G to create a responsive supply chain
that would produce and supply products as per demand at the customer level. It adopted the line in
their supply chain network: We need to work off of real demand, so that we produce what is actually
selling, not what is forecast to sell.
How did P&G implement CDSN?
P&G collaborated with its partners across the supply network to win consumers at the point of
purchase. It Implemented an online system-Web Order Management which enabled retailers to
connect to P&G and access its scheduling, inventory and replenishment levels. Various other initiatives
like using multifunctional resources, joint scorecards and sophisticated technology were undertaken in
collaboration with retailers.
Intelligent Daily Forecasting (IDF)
IDF is one of the most important component of CDSN. IDF is a software used by P&G to forecast the
demand based on actual sales. Following are the Inputs and outputs that this software provides.
Input: Daily Order Information , Daily Shipment Information ,Weekly shipment forecast
Output: Daily estimates for next 42 days , Refreshed Daily
It tracks daily demand across different stores, and that itself becomes the replenishment plan of P&G for
those stores. Actual demand is picked up from the scanner data at the point of sale and it is made
available at the plant where it becomes part of the daily production schedule. As a result of
implementing IDF, P&G is running few plant at 6-8 hours response time.
CHALLENGES IN CDSN
The $83 billion company had a total of 90000 suppliers with 150 manufacturing plants globally.
Reaching out to millions of customers across the globe was a major challenge. Meeting the diverse
challenges of developed and developing markets as such markets like India depended on unorganized
retail. The challenge was to reach the global large-scale retailers as well as the small and local street
shops. Creating consumer value and meeting rising supplier costs.
Impact of CDSN
Performance Indicators
Forecasting Accuracy: Improved forecast accuracy by 30%.
Shelf-Level Out of Stocks: The percentage of products that are out of stock on retailers shelves
at any given time. P&G has cut this to 5%, from 10% within 8 months of implementation.
Total Supply Chain Response Time: The time from when a cash register records the sale of a
product to the purchase of raw materials to produce its replacement. From six months, it came
down to two months.
Total Supply Chain Inventory: The hard count of all products flowing through the supply chain at
any given moment, whether on store shelves, in back of the store, at warehouses, in trucks or
wherever. P&G got a daily count, rather than weekly or monthly and hence reduced safety
inventory by 10%.
Pricing-Design from the Shelf Back: CDSN helped in determining an acceptable price point for an
item and then working it back through manufacturing and distribution to see if that product can
be delivered at a price acceptable to consumers and a profit acceptable to P&G.6. Topline and
bottom-line: Increased overall sales by 15% in one year. Net profits witnessed a 19% gain from
$4.35 billion to $5.19 billion.









Control Tower Program
This optimization method includes
Logistics optimized by making changes to the rate, route, mode and method of transportation.
Helped in eliminating inefficiencies such as loading and unloading delays, rush transport up-
charges, dead legs (empty trucks) and production line stops.
The lead logistics provider centrally controls and optimizes the product flows, delivering
maximum truck fill for every kilometer travelled in the fastest possible time, in an ecologically
friendly manner.
It was kicked off in 2010 in Central and Eastern Europe, Middle East and Africa (CEEMEA). Turkey and
Egypt were the first countries in CEEMEA region to adopt the Control Tower logistics optimization effort.
Impact of CTP
Amount of empty truck journeys reduced by over 15% to date.
58% reliability improvement on inbound operations in Egypt.
68% improvement in our finished product inbound operation in Turkey.
67,000 metric tons reduction in CO2 emissions.

Major Acquisitions
2012: New chapter, a vitamins supplement business for $134 million cash
2011: Ambi Pur, an air freshener business for $474 million
2010: Natura,a leading producer and distributor of brand premium natural pet foods for $425 million
2008: Frederic Fekkai, a premium hair care brand, in Beauty acquisition for $381 million
2008: Nioxin, a leader in the scalp care professional hair care market, which was incorporated into
Beauty for $368 million
2005: Acquisition of the Gillette Company for approximately $53.43 billion. Gillette is a leading
consumer products company that had $10.48 billion in sales in its most recent pre-acquisition year
ended December 31, 2004. The acquisition of Gillette has added ve billion-dollar brands to P&Gs
stable of 17 billion-dollar brands. It has more than 70 percent global market share of razors and blades,
40 percent global market share in alkaline batteries and 36 percent share of the global toothbrush
market.
Apart from the above Procter & Gamble acquired a number of other companies that diversified its
product line and significantly increased profits. These acquisitions included Folgers Coffee, Norwich
Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton's Old
Spice, Max Factor, and the IamsCompany, among others. P&G exited the food business in 2012 when it
sold its Pringles snack food business to Kellogg's for $2.75bn after the $2.35bn deal with former suitor
Diamond Foods fell short. The company had previously sold Jif peanut butter and Folgers coffee in
separate transactions to Smucker's.
Financial Highlights


Corporate social responsibility
Procter & Gamble has, for several years, funded a recycling school in the slums of Cairo, Egypt.
Many of the people in the village of Manshiyet Nasser collect garbage and have done so for
decades. Procter & Gamble along with UNESCO has started the Mokattam Non-Formal
Education Project. The project teaches the people of the village about the business and
economics of recycling and how to properly recycle plastic.
In December 2008, The US Environmental Protection Agency Design For Environment program
awarded P&G its highest level of recognition, Champion, for P&G work in developing safer
detergents under the Safer Detergents Stewardship Initiative (SDSI).
SAVE THE GIRL CHILD Procter & Gamble Partners with Save the Children to Help Girls Stay in
School Industry Leader to Provide Health and Hygiene Education and Products to 9,500 Girls
Shiksha (Education): Padhega India. Badhega India.

P&Gs flagship Corporate Social Responsibility Program Shiksha is an integral part of our global
philanthropy program - Live, Learn & Thrive. Now in its 8th year, Shiksha has till date helped 280,000
underprivileged children access their right to education. The program has built & supported over 140
schools across India, in partnership with NGOs like Round Table India (RTI), Save the Children (STC),
Army Wives Welfare Association (AWWA) and Navy Wives Welfare Association (NWWA), amongst
others.


PnG in NEWS

The maker of Tide laundry detergent and Gillette razors brought back AG Lafley as chief
executive in May, as it came under pressure from investors to pick up the pace of
improvements.
In an expected move, the company will split its household care and beauty and grooming units
into four sectors starting July 1: Global Baby, Feminine and Family Care; Global Beauty; Global
Health and Grooming; and Global Fabric and Home Care.
The much-anticipated entry of Procter & Gamble (P&G) in Indias largest oral care category,
toothpastes, turned true in May 2013. The company announced its plans to make the foray
under the Oral-B umbrella, familiar to Indians now as a toothbrush maker. Actor Madhuri Dixit,
who is brand ambassador for Oral-B in India, will endorse the new toothpaste besides
toothbrushes.

Top Competitors
PnG faces tough global competition from Johnson and Johnson, Kimberley Clark, Hindustan Unilever.
Below is the compared profiles of top FMCG'S.





References
http://web.mit.edu/sheffi/www/documents/genMedia.theValueOfCPFR.pdf
http://www.informationweek.com/807/cpfr.htm
http://www.baselinemag.com/c/a/Projects-Supply-Chain/Procter-Gamble-Delivering-Goods/
http://scm.ncsu.edu/scm-articles/article/introduction-collaborative-planning-forecasting-and-
replenishment-cpfr-a-tu
http://www.pg.com/en_IN/sustainability/reports.shtml
http://www.washburn.edu/sobu/apm/Reports/PG.pdf
http://www.ftc.gov/bcp/workshops/techade/pdfs/presentations/hughes.pdf
https://pg.newshq.businesswire.com/sites/pg.newshq.businesswire.com/files/publication/file/PG_2012
_AnnualReport.pdf