Summary

This case introduces Proctor & Gamble, a company founded in 1837 by its founders, William proctor and James Gamble. Engaged in the consumer industry, providing various consumer good including Food and Beverages Items, cleaning agents and personal care product to its customers available in the market. Which, in turn, allowed the company to record tremendous revenue amounting to US $84.17 Billion in the year 2013, with US $11.31 Billion in profits. The company had employed around 121,000 people, in its branches extending to over 160 countries around the world. However, the company had established it’s headquarter in Cincinnati, USA. Furthermore, it can be assessed that, the company had come a long way and enhanced its economies of scale to a level that, it is now recognized as, the leader in consumers goods. Which, in turn, had allowed the company to expand its reach around the world, in an attempt target more demographic of customers. However, the global growth prospect had presented tremendous challenges for the company with respect to Distribution channels, product sourcing and customer zones. In which, the company had developed efficient strategic model to mitigate the risk of any adverse effects cause by the lack in any of the above mentioned functions. Therefore, the company employed the operational research and management science technique, while integrating the geographic information system, in line with its distribution channels and customers zones. Firstly, the management of the company believed that reducing the number of plants would reduce the cost associated with them and result in making its supply chain more efficient.

Restructuring P&G’s Supply Chain Harvard Case Solution & Analysis

However, it was evaluated that, the reduction in plant would attribute in increasing its distribution costs. Moreover, the company faced a tough decision, as to which plants to close, without decreasing the revenues associated with those plants, to a level that would adversely affect the overall profitability of the company. Similarly, the company determined that, to successfully reduce the plants, it needs to evaluate those product categories, which required relatively, the same technology to manufacture and establish effective production processes to produce them in the same plant that would result in maintaining the capacity requirements based on the demands of the customers. Additionally, the company had divided its customer’s base into 150 different customers’ zones and determined that for each zone, a distribution channels should be established, that would provide the customers available in those zones with the products required by them. Moreover, the company was responsible for providing various products categories to its customers in the market. However, the raw material for these product categories were gathered through different sources. Therefore, the company needed to decide on an effective location for its distribution channels that would account towards providing an optimum location for distributing, its product to the customers, while incurring the minimal transportation and handling costs. Similarly, while maintaining the level of satisfactions of the customers. In which, it was assessed that, the management treated the distribution channels, as just another customer with the demand equaling to the total demand assigned to that distribution channel with respect to their customer zone..............

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