Time-Based Competition: Operations Management and the Supply Chain [Procter & Gamble (P&G)]

The study aims at discussing the time-based competition or speed-to-market approach. It covers a brief of a number of industries and companies to see the impact such companies are making with their agile supply chain. The study finds that the fashion industry is the fastest to adapt to the agile supply chain. P&G makes the most of the impact in FMCG industry. With the help of flexible strategies like reduction in signatories, P&G continues to deliver the accelerated development of products.

Running head: TIME-BASED COMPETITION
Operations Management and the Supply Chain
[Procter & Gamble (P&G)]
Name of the student:
Name of the university:
Author note:

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Executive summary
The study aims at discussing the time-based competition or speed-to-market approach. In doing
so, it covers a brief of a number of industries and companies to see the impact such companies
are making with their agile supply chain. The study finds that the fashion industry is the fastest to
adapt to the agile supply chain. Amzon.com and eBay do also impress with their accelerated
supply chain. P&G makes the most of the impact in FMCG industry. With the help of flexible
strategies like reduction in signatories, P&G continues to deliver the accelerated development of
products.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 A brief overview of time-based competition and how organizations have evolved to make
their supply chain process faster..................................................................................................3
2.2 Literature on time-based competition....................................................................................4
2.3 Application of ideas/concept of time-based competition to P&G.........................................9
Management of speed-to-market.............................................................................................9
PESTLE analysis...................................................................................................................10
2.4 A critical evaluation of its effectiveness compared to industry standards......................11
3. Conclusion.................................................................................................................................13
References......................................................................................................................................14

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1. Introduction
The entire focus, which once was on mass production to meet the global demands, the
structural efficiency and management of workers’ productivity, is now shifting towards the time-
based competition. Now, the time-based competition is in regards to the reduction of production
and distribution times and the time required for products to reach to the market. In recent times,
the time factor has become a source of competitive advantage. Few firms are aggressively
looking towards this trend with their flexible and strategic responses. This study aims at
understanding the importance of time in production, distribution and reaching of products to its
end users. It also discusses an organisation which has its focus increasingly shifting towards the
speed factor.
2. Discussion
2.1 A brief overview of time-based competition and how organizations have evolved to
make their supply chain process faster
Today in the digital age, mobile customer base responds faster than any other customers
to any new product or service. Customer nowadays purchases seamlessly through a number of
purchasing channels. They also actively participate on social media platforms to share their
feedbacks and remain updated with latest from their brands. These practices do not just create
enormous opportunities but also a number of threats. Consumers nowadays do not just expect the
quality products but also a responsive approach from their brands. They want their
disappointments being treated on an urgent basis (Roh, Hong and Min 2014). These situations
just make a sense that agile companies can only fulfilthe increasingly growing demands of
consumers.

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The digitalization of purchasing and feedback sharing on products & services create a
huge amount of data. However, such an unprecedented amount of data can produce the results
only if these data are accessed in real-time. Retailers are now increasingly becoming acquainted
with the practices needed to respond to the urgency. Digital vendors such as eBay and
Amazon.com are reacting on a speed note to this increasingly changing consumer behaviour.
Now, if FMCG companies want to maintain and retain their strong position in the market, they
need to boost theagility in supply chain and manufacturing(Bcg.com 2018).
According to BCG in the benchmarking database, top FMCG companies are producing
products at 7 months faster than other companies. As per BCG, beauty and cosmetic product
making companies were the fastest to adapt to this rising Trend. Companies under the heavily
regulated industries such as tobacco and alcohol were among the slowest of companies to follow
the trend for agility. In the fashion industry, Zara tops the list in terms of designing, producing
and delivering the products. It takes around only two weeks to produce new products whereas the
average time taken by any other fashion companies is around 10 months. The average time
consumed by companies other than Zara is still much faster than the speed leaders in the FMCG
industry. In the context of the FMCG industry, agility in productions and promotions may be
particularly useful in countering the competitive actions or reacting to market dynamics. Leading
FMCG companies are heading to accelerated development. They, on an average,can deliver
products to market in just 4 months. The time span is one third lesser than the time consumed for
the production of most new products. On the other hand, ordinary performers takearound 6
months on an average to produce the products on the market(Bcg.com 2018).
2.2 Literature on time-based competition

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As opined by Yusuf et al.(2014), the upstream division of the oil and gas supply chain is
specifically influenced by the speed factor as huge numbers of small and medium-sized
enterprises are heading towards the concept. It all now depends on how effectively the oil and
gas companies manage this new trend. They are still to make a bigger impact in regards to supply
chain and production agility.
As stated by Ecksteinet al.(2015),both supply chain adaptability and supply chain agility
can positively impact the operational and cost performance. Samples collected from 143 German
forms did help to identify the relationship between supply chain adaptability and agility. Samples
were investigated for the impact of supply chain adaptability and agility on cost and operational
performance. The method that was used for this research was hierarchical regression analysis.
The investigation was grounded in terms of contingency theory and dynamic capabilities view.
The research could identify the supply chain agility as the link between supply chain adaptability
and performance. It means that the speed factors such as to produce, distribute and get the
products delivered to the market in comparatively less time will also positively impact the supply
chain adaptability.
According to Chan, Ngai and Moon(2017), responsiveness to market and customers have
now become an indispensable needs for all industry especially the fashion industry. The article
finds strategic and manufacturing flexibilities as the critical antecedents to attain the supply
chain agility. It indicates towards flexibility in strategizing the plans and manufacturing
capabilities. To validate the fact, the authors collected a sample of 141 garment manufacturers.
The samples were analysed using the structural equation modelling. The results were as
expected, which proved that strategic and manufacturing flexibilities do positively impact the
supply chain agility. However, there is a difference in the level of impact between strategic

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flexibility and manufacturing flexibility. Strategic flexibility was found directly and significantly
influence the firms' performance whereas manufacturing doesn't. The study finds and confirms
the importance of supply chain agility in and across industries especially in the fashion
manufacturing industry.
As stated by Zhonget al.(2016), there are ample financial and non-financial benefits of
agile production. Companies with greater agility will have maximum potential to boost the top
and bottom lines of the company. Such companies will also be highly flexible with consumers’
demand. Financial benefits of agile production are more, which directly outplays the cost
incurred in delivering products to market in a speed-to-market format. Products, which reach to
market in relatively lesser time will probably have the less competition. Hence, profit-making
opportunities will be more there. Thenon-financial benefits are even bigger than the financial.
This is because of an increased agility in supply chain and production that allows companies to
fulfilthe changing consumer demands. The supply chain agility also helps companies to respond
faster to the competitive moves. On top of all, the speed factor can also promote the company's
image, which impactsthe employee satisfaction.
In the opinion of Govindanet al.(2015), production and supply chain agility can improve
the market forecast capability. This is for a fact that the elapsed time between designing a
product and releasing it to the market is comparatively shorter. Marketing executives who are
engaged in making forecast can easily understand the supply and demand, especially for trendy
products. Supply chain agility can help to raise the brand value. It can do so by fulfilling the
consumer needs and getting the products to the market in comparatively lesser time. The
efficiency to produce products in a shorter time will also allow selling the products at premium

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pricing. It is more effective than private-label products.This will also help to attract the skilled
talent and enhance the employee retention rate (Cooper 2016).
As discussed by Dubey, Gunasekaran and Childe(2018), an innovation project has to pass
through a number of departments within a company. For example, it moves from central brand
groups to production and Research & Development (R&D) to regional marketing and
distribution. Such a process is very time consuming and can be a barrier to an agile supply chain.
However, if a single project leader is assigned to all such transition having authority over
timelines and processes, a smooth transition of innovation from one to another department can
then be ensured. A project manager can also be a resource to the knowledge base. There are
some companies who are smoothly managing the transition of information between departments.
Project teams in such few companies carefully track their own work from the start to finish and
then handover the completed task to another department. This is how those few companies are
able to smoothly manage the flow of information between several departments.
As opined by Wardet al.(2018), speed-to-market is not just about speeding up some
projects while compromising with others or keeping it in queues. It is rather about prioritising
one or a few projects and streamlining the others. It means that some projects deserve that extra
push to make an impact. It generally happens with trendy products. Companies especially the
FMCG companies are focusing on standardizing the production method. For example, British
American Tobacco Company established a board-level innovation panel to demonstratea senior
level commitment to the process and ensure the transition of information between departments.
The innovation board aims to prioritise and accelerate different projects based on their explicit
criteria. The urgent or valuable projects travel through a separate ‘fast track’with the help of
extra resources and priority treatment.

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As stated by Gligor, Esmark and Holcomb(2015), projectsare delayed due to a number of
signatories involved in the transition process. It goes through various departments before it
reaches to the market. It is, therefore, important to map both formal as well as an informal
decision as it defines the decision practices. Large organisations, in particular, are involved in a
huge number of signatories on different levels. A significant amount of time gets wasted just for
seeking the approvals. There is a need to reduce the number of authorities involved in signatories
to facilitate the agile supply chain. The decision makingwill then become much faster and
efficient too (Bell, Autry and Griffis 2015).
Key Elements
Flexibility: It is required both at operational and strategic level
Signatories: The number of signatories needs to be reduced by reducing the number of
authorities involved in the process.
Innovation panel: There should be an innovation panel, which will look after the innovation
process and communicate with other departments. It will facilitate the flow of information
between different departments in comparatively less time.
Forecast capability: Agile manufacturing and supply chain operations can enhance the forecast
capability. One of the ways to enhance the forecast capability is to standardise the production
process.
Financial & non- financial benefits: Profits will increase. Customer satisfaction and employee
retention will also improve.
Responsiveness to market and customers:Agile production and supply chain facilitates to
became known as responsive to market demands and consumer needs.

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Operation and cost-performance: Speed-to-market approach positively impacts the operational
and cost performance.
2.3 Application of ideas/concept of time-based competition to P&G
Management of speed-to-market
P&G in the 90s was already making the superior products in every six months. Products
were of a variety of types. Lower-priced products were also being made. By launching lower-
priced diaper products so frequently, the company was able to fend off the low-cost imitators. It
just shows that P&G was already into the speed process. Procter & Gamble has been using the
speed process since 1999. At that time, the company was able to cut the product development
process by about 18 months. The key factor, which helped P&G to reduce the time span for
product development was its step to reduce the signatories from 40 to 20. The strong support at
the top has helped P&G to attain a highly formalized process and an efficient push towards the
discipline process(Bcg.com 2018).
P&G is now actively expanding its consumer-centric model to include added features like
customer’s needs. The company is trying every bit to maintain a quicker than ever response
times. To enhance its ability to respond to consumer needs, the company is taking strategies like
Mega distribution centres in attractive and strategic locations across a few countries. Such
facilities can both receive and cross-dock products from the entire P&G’s business units. These
facilities are being created to support the speedy and efficient delivery of truckloads.
Additionally, the company is also shifting away from forecast-driven model to demand-driven
replenishment model to efficiently fulfil the demands. The model will help the information
coming from its retail customer’s base on point of sale (POS). Suppliers are also being

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encouraged to develop “supplier villages” close to its different plants to reduce the time
consumed for transporting. The strategy is very much similar to a just-in-time model deployed
by the automotive industry(Bcg.com 2018).
PESTLE analysis
Political: (Chan, Ngai and Moon 2017)
 Increased globalization of products and services is leading to the demands for mass
production
 Uncompetitive labour wages are encouraging to product standardization
Economic: (Ecksteinet al. 2015)
 Increasingly growing purchasing capacityin emerging and developing nations
 Increasingly growing consumer base in developing and emerging nations
Social: (Dubeyet al. 2018)
 Changing purchase behaviour
 Online purchasing has now increased
 Increased tendency to give feedbacks and follow brands on social sites
 Rising demands for getting the problems addressed on a faster note
Technological: (Gligor 2016)
 Emerging and disrupting technologies are driving the supply chain operations
 Possibility to attain an unprecedented amount of data with Big Data
 Emerging technologies to support the utilisation of data in real time

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Environmental: (Tarafdar and Qrunfleh 2017)
 Increasing carbon footprint requires the utilisation of sustainable methods for production,
distribution and the entire supply chain operation
 Sustainability challenges to the development of solutions
Legal: (Dubey, Gunasekaran and Childe 2018)
 An unpredicted increment in taxes
 Strict policies for labour laws
The PESTLE analysis section explains that P&G has several external challenges, which
are encouraging the company for a speed-to-market approach.These are in the form of external
environments such as emerging technologies, political challenges, social behaviour of people and
others have all prepared a platform of competition. P&G in the 90s was able to silence the rising
threats from private-label brands by constantly bringing productsevery six months. Those
products were cheaper also. In the same way, the company worked on increasing the number of
distribution centres, so that, transporting time could be reduced. Suppliers were being
encouraged to live near or next to the ‘Suppliers Village’, so that, the travel time between
suppliers and manufacturing facilities is reduced. The external pressure such as the rising
popularity of private-label brands and time-based competition have both encouraged P&G to
think in an unconventional way. P&G as a company has constantly looked for using its
innovating capabilities to produce an improved business experience for its stakeholders,
shareholders and customers. The company fits well into the agile supply chain, which is now
becoming a fact these days (Bcg.com 2018).
2.4 A critical evaluation of its effectiveness compared to industry standards

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According to the BCG, companies in the FMCG industry are far more behind to Fashion
retailers like Zara and digital vendors such as Amazon.com and eBay in terms of using the agile
supply chain strategy. On a comparative note, BCG suggests that in order to maintain a strong
position in the market, FMCG companies must utilise big data to support agility in operations.
The impact of agile supply chain and manufacturing is higher on fashion industries. The average
of companies apart from Zara in the fashion industry is faster than the top players in the FMCG
industry in regards to speed (Bcg.com 2018).
Accelerated development is a rising trend. FMCG companies need to react to it to remain
stronger in the market. Most of the top companies in FMCG can produce products every 4
months. The time span is one-third of the average time, which companies had normally required
for product development. Average companies may be needing 6 months on an average to
produce new products. On the other hand, P&G had already mastered the art of producing new
productsevery six months. The company is doing this since the 90s to counter the rising
popularity of private-label brands. Now, after nearly 20 years, P&G has the increased ability to
produce products in quite a less amount of time. There are three key imperatives to time-based
competition, which P&G seems like have mastered like standardise, prioritise and mechanize
(Bcg.com 2018).
By 1999, both P&G and Unilever had required a time span of 36 months to produce new
products. However, P&G then started to think strategically towards product development. The
thought process had worked and the company was able to reduce the time span involved in
product development from 36 to 18 months. Such a notable change was mainly due to one smart
strategy, which was to reduce the number of signatories. Initially, a product had needed to pass
through 10 people authorised for signatories, which was later on reduced to only 6. This is how

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P&G was able to bring agility into decision making and approval seeking process. It eventually
impacted its production and supply chain capabilities(Bcg.com 2018).
P&G looks beyond to other FMCG companies in terms of speed-to-market approach. For
example, Unilever is more focused on sustainable supply chain. The company is focused on
reducing its environmental footprint impact to support & promote and improve the livelihoods of
farmers and communities in which the company operates. FMCG industry as a whole is moving
slowly towards speed-to-market approach than other industries. The fashion industry is
comparatively more into the agile process. Online Giants like Amazon.com have also been fast
towards the approach. However, in the FMCG industry, P&G is much more superior to other
companies.
3. Conclusion
In summary, it can be said that agile production and supply chain operations are
influencing the different industries. Fashion, retail and FMCG industries seem to like having the
maximum influence of time-based competition. Zara is far much ahead to the best of FMCG
industry in regards to cutting the time span for product development. Amazon.com is another
retail company, which is making an impact with its agile supply chain. In the FMCG industry,
Procter & Gamble appears ahead to the likes of Unilever in terms of cutting the production
period and speeding the product development. The reduction of signatories from 10 to only 6,
setting up a number of distribution centres and placement of suppliers close to the manufacturing
facilities have all boosted the speed-to-market capabilities of P&G.

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