Bringing the Voice of

the Consumer Into

Your Supply Chain

Amr Darwish
Customer Service & Logistics
Manager
Procter & Gamble,, Near East
1 About P&G

2 The Consumer is Boss

3 Why Change

4 What is CDSN

5 How to Change
A Company of Firsts
Procter & Gamble
23 billion dollar brands
more than
th $75 billion
billi annuall sales
l
over 140 plants in more than 80 countries
 P&G Egypt

• InEgypt since 1986

• Manufacturing Facilities in Oct 6th
with 1.5 billion Egyptian pounds
investment
• 750 p
person workforce in 2008
• Biggest packaged goods exporter out
of Egypt
• Awarded National Award of Quality by
Ministry of Trade & Industry in 2006
 Two Moments of Truth

Wh they
When th choose…
h …and
d when
h ththey use
Winning at the First Moment of Truth
The need for a consumer-driven supply network
 11

Consumer is Boss
Ever-increasing expectations

• Innovation
• Value
• Shelf presence
• Customization
• In-store experience
Retailers are Changing
T meett the
To th needs
d off today’s
t d ’ consumers

• Importance of free cash

flow
• Growth of private labels
• Focus on margins
• Seeking to be unique
• Seeking to offer
solutions
• Operational excellence
New Pressure on Manufacturers
Today’s supply networks aren’t fast and flexible enough

• P
Pace off innovation
i ti
• Increasing number and complexity of
products
• Demand for affordability and value
• Need for speed to market

20% increase in innovation

for past three years
Challenges in the End-to-End
S
Supplyl Chain
Ch i

Agility Scale
• Speed to market • Ongoing effort to
• Unique challenges reduce time and costs
of developing and in order to create value
developed for our business
markets
Differentiation
• Unique needs of large
large,
global retailers vs. small,
local high-frequency stores
S
Supply
l Chain
Ch i Evolution
E l ti

Shift from Internal only

metrics to a focus on
delivering:

• Reliability and flexibility

• Creating value with retail
customers and
consumers to drive
business growth
 What Does Being
Demand Driven Mean?
• IImprovedd demand
d d visibility
i ibilit
through demand sensing/shaping
and visibility
y of events
• Agile supply networks capable of
using more accurate/granular
d
demand dddata
• More flexible manufacturing
• Smaller
S ll b batches/more
t h / ffrequentt runs
• Late stage differentiation
p
• Compressed material lead times
• Produce any product on any day
• Information replaces inventory
 Joint Value Creation
Sales & Margin
Turnover Improvement

Innovation & Affordable

New Technologies JVC Differentiation

Demand
Creation

Reliable
JVC Service
JVC

Agile, Demand-
driven

Working
Capital
Change the Culture
E t
External
l Focus
F
Becoming Externally Focused
Understand
U d dhhow the
h supplyl network
k performs
f ffrom the
h
shopper and retailer perspective

• Remove barriers between supply community and

commercial/sales (e(e.g.,
g rewards)
• Create awareness of customer needs into
company/category
p y g y management
g
• PS leaders need to talk the
business language
(e.g., growing the business)
Change the
Relationship with
Customers
Full Collaboration
Build Internal Capability
• External focus: culture/measure change
• Operational
O ti l excellence:
ll service
i and
d availability
il bilit
• Synchronization: information replaces inventory
• Shelf-back design
• Agility: take time and cost
out of the system
• Flexibility: customer and
consumer driven differentiation
• Customer collaboration:
joint value creation
 Produce To Demand Continuum

Production Triggered By FORECASTS Production Triggered By KNOWN DEMAND

Orders Customer Inventory Levels,
Orders, Levels POS

Shorten
Produce To Order
Today’s Produce Every Cycles Customer POS
Today, Ship
Operation SKU Every 2-wks < 3 Days Replenishment
Tomorrow/Todayy

Produce Every Produce Every Produce to Produce To Replenish

SKU Every Month SKU Every Week Replenish Customer DC Inventory
Inventory Withdrawal

FOCUS: FOCUS:
Improve
p Reliability/
y Capability
p y Supply Chain Synchronization
Reduce Inventory Levels Supply Chain Integration

LEAN AGILITY
© 2002 The Procter & Gamble Company, All Rights Reserved.
What about the Initiative process?
R i
Reinventing
ti the
th supply
l network
t k

• Shelf back based product design to

win at the shelf
• Short cycle consumer/retailer
learning
• Answering question of what
innovation rhythm is required to win

• Source of new ideas

• > 50% Connect & Develop

• Supply
pp y Design
g integrated
g from the
beginning
• Supply Chain Time
 Supply Network Design Process
• Brand Equity • Choice Structuring
1. Business Strategy • Price Driven Economics
• GBU & MDO Plans
Why?
?
Business Needs
• Value in Supply Chain
• Business Strategy
• Industry, Technology Trends 2. Strategy Engagement • Sourcing Strategy
• Organization Focus

Supply Network Requirements

• Scorecards
hat?

• Key Performance Measures

3. Gap Analysis • High-Level Mapping
Wh

SN Performance Gaps

• Options Analysis 4. Strategic Design

Strategic Direction
e?
Where

• Supplier Selection CBA • Outsourcing CBA

• Siting / Sourcing 5. Structural Design • Distribution/Replenishment

Supply Network Structure

• Demand Analysis • Operating Strategy CBA
• Production
P d ti Strategies
St t i 6 Operational
6. O i l Design
D i • Simulation
Si l i
How?

• Inventory Policy • Mapping

Demand Strategy Distribution Strategy
Capacity Strategy
Initiative Strategy Inventory Strategy
Planning Strategy
Material Supply Strategy Information Strategy
gy
Production Sourcing Strategy
Material Sourcing Strategy

• Scorecards 7. Deploy & Monitor

© 2006 The Procter & Gamble Company, All Rights Reserved..