SUPPLY CHAIN CAPABILITY and the First Moment of Truth

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SUPPLY CHAIN CAPABILITY and the
First Moment of Truth
South Carolina International Trade Conference May
30, 2007
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AGENDA

• PG Brief introduction
• First Moment of Truth
• Logistics affect on the FMOT
• How PG ensures logistics excellence and wins
  at FMOT

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IN THE BEGINNING
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PG AT A GLANCE

• 75,000,000,000 in sales
• 4B logistics spend
• 275,000 TEUs
• 3500 lanes (25 touch U.S.)
• Over 500 whses 45MM sq. ft.
• Selling in 160 countries, Mfg. in 90
• 135,000 employees

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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

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But most of all were a company of Brands
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21 - BILLION BRANDS
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• Rather than talk external processes, Ill focus
  on PGs attempt to ensure a successful end
  result or what all people in PG know as the
• First Moment of Truth

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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!

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• What does FMOT mean to logistics
  professionals?
• Its what we do move product at the right
  time/price/condition
• Why is PG successful?
• Supply chain coordination/collaboration
• Innovation/technology
• Logistics sourcing
• Training

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Coordination/Collaboration

• 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

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Innovation/Technology

• 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

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Logistics Sourcing

• 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

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Training

• 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 PG and employees is
  inseparable

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In Conclusion

• PGs Wall Street commitments, require bottom
  line growth of 4B-5B/yr.
• Most dont initially think of successful
  logistics as a requirement for this.
• But the power of doing logistics right the
  first time is recognized rewarded in PG.
• Systems/processes are in place to ensure we move
  cargo to the shelf with excellence to win at the
  First Moment of Truth!

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PURPOSE
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VALUES
PRINCIPLES
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