Analyzing P&G's Supply Chain Management Strategies for Business Growth

This report delves into the significance of Supply Chain Management (SCM) in the context of business operations, emphasizing its role in cost reduction, enhanced customer service, and overall profitability. The report uses a case study of Procter & Gamble (P&G) to illustrate the practical application of SCM strategies. P&G's shift from traditional marketing approaches to a more integrated supply chain model, including partnerships with companies like Wal-Mart, is analyzed. The report highlights how P&G's focus on innovation, particularly in areas like inventory management, logistics, and customer relations, enabled the company to mitigate demand variations, optimize production capacities, and establish strong relationships with both customers and suppliers. The analysis underscores the importance of adapting supply chain strategies to meet evolving business environments and customer demands, demonstrating the crucial role of SCM in achieving sustainable business success.

Production Management
4/9/2020

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Supply Chain Management
SCM is considered to be the important segment of every business whether it is large or small.
SCM is said to be the active administration of the supply chain procedure in order to increase the
value for the customer value and gain competitive advantage for the business. The main
importance of SCM to a manufacturing firm is decreased cost of purchasing, decreased
production cost, enhances customer services by providing on time delivery, services, and right
quality and quantity. In addition to this, SCM is important because it augments the profit
leverage and increase cash flow (Zijm, et al, 2018). The concentration of the SCM evolves in
reaction to the altering environment of business and changing life cycle of the product. Thus,
there are different strategies adopted by business to response to these changes in the market for
ensuring the evolvement of the supply chain.
For instance, marketing excellence is the major cause of the dominance of Procter & Gamble's in
the industry of consumer products. But, while expanding the service and products in order to
meet the market opportunities, there were complexities resulted in creating difficulties in
fulfilling the demands of the customer and retail partners. The use of traditional strategies of
marketing such as price promotion and in-store sales resulted in generating variations in the
demand of the product. For meeting the short-term marketing-induced peaks in the demand,
company got involve in investing in manufacturing capacities, logistics capabilities, warehouses,
and inventories.
To address these problems, P&G got involve in the modification of its supply chain focus and re-
created itself by the adoption of innovation strategy. Operating with suppliers and customers, the
company got into the partnership with Wal-Mart, nearly eradicated price promotions, and

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rationalized its logistics and unremitting replenishment programs (Bradt, 2018). This initiative of
the company decreased the uncertainties and variations in demand, thus decreasing the
requirement for surge capacities of the production and huge inventories. Therefore, by
developing their supply chain from marketing to logistics, inventories, and production to address
the altering business environment, P&G was capable to decrease the cost, fulfil the demand of
the customer, and maintain strong relationship with customers and other partners.

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References
Bradt, G. (2018) How P&G Became “Part of Walmart” [online]. Available from
https://www.cornerstone-group.com/2018/08/09/how-pg-became-part-of-walmart/ [accessed 9
April 2020]
Zijm, Z., Klumpp, M., Regattieri, A., and Heragu, S. (2018) Operations, Logistics and Supply
Chain Management 1st ed. Germany: Springer.