WalMart & P&G the emergence of supply chain excellence
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Transcript of WalMart & P&G the emergence of supply chain excellence
THE EMERGENCE OF SCM EXCELLENCE
TEAM MEMBERSShalini Tripathy: DM16141Supam Das: DM161Ravi Agrawal: DM161Apoorva Singhal: DM161Hiranya Deshmukh: DM161
19% think that 6% think that
47% think that 28% think that
SCM
Logistics
SCM
Logistics
SCM
Logistics Logistics SCM
Consumer
Manufacturing plants
Distribution centres
Logistics
Retail outlets
INFO
RM
AT
ION
INFO
RM
AT
ION
INFORMATION
CONSUMPTION
Effective tool for reducing transaction costs.
Better information sharing decreasing need for excess inventory while increasing sales.
Adds value to the customer service function.
Decreased time and costs adds to the competitiveness in the respective industry.
Adversarial
• P&G was too complex & inflexible
• It had 12 internal divisions
•Wal-Mart found it difficult to do business with
Transactional
• Focus on day to day sales
•No long term planning
•No customer needs identification
Fragmented
•No information sharing
• Activity limited to buying & selling function
•No dedicated team of P&G for Wal-Mart
Better IOIS (Inter organizational information sharing).
Channel partnership.
Category Management.
Continuous replenishment.
Process Co-ordination.
EDI (Electronic data interchange).
Collaborative planning forecasting replenishment (CPFR).
Wal-Mart & P&G shared long term business partnership through total information sharing to serve the mutual customer-the consumer.
They used technology for channel partnership
Joint scorecards
POS data sharing
Understanding consumer driven sales data
Cost cutting through automation
P&GDATA
WAL-MARTDATA
DATA DELIVERY HIGHWAY
Marketing analysis
Activity Based
costingReplenishment
Data sharing
Shelf mgmt
Categoryanalysis
ProfitabilityMarketing
Two companies were functionally interwoven at multiple points
1) Buying & selling
2) Production & product development
3) Finance
4) Logistics
The first collaboration was for JIT ordering of disposable Pampers & Luvs diapers.
Focus on efficient replenishment of products
Part of ECR (Efficient consumer response)
Goals
Increased inventory turns
Decreased inventory levels
Decrease stock outs
Boost warehouse efficiency
Increase customer service value
Standard for exchanging data via any electronic means.
Purchase orders, invoices, advanced shipment notification, and financial payments can all be managed through the EDI.
Innovation of a price checking tool to improve billing accuracy for accounts payable & receivables.
Understanding of the retailer, their customers and the consumers who buy your brand.
Integrating P&G market data, Wal-Mart POS data and third party market data helped P&G understanding consumer specific needs and make decisions accordingly
Critical for common expansion goals
Strategy & Planning: The Joint Business Plan then identifies the significant events.
Demand & Supply Management: Sales Forecasting, which projects consumer demand at the point of sale
Execution & analysis: Order generation & fulfilment and performance assessment
In 2009 Wal-Mart created a sustainability index to meet the need for sustainable produce practices
They created a three stage process wherein
1) An initial Supplier Sustainability Assessment program
2) The creation of a Lifecycle Analysis Database
3) The finalization of the Index and a presentation to customers
Procter & Gamble and Wal-Mart will prioritize reducing the "water per dose" for liquid laundry detergent by 25 percent
Wal-Mart has investments in renewable energy, leaders in phasing out toxic chemicals and creating the increasingly influential Sustainability Index
These are some of the examples of the retail giant towards green business practices.
Big bazaar and future group supply chains working in tandem for their motto of low price product offerings (isse sasta aur accha aur kahin nahi)
Channel partnership.
Usage of new edge technology for information & data sharing for managing inventory & sales.
Six software systems at work
1) ERP
2) Warehouse management system
3) Automatic print & apply system
4) Automatic packing
5) Online conveyor based weight check system
6) Sorting system