P&G's Logistics Revolution: Co-creating Value

Managing collaborative relationships with such scattered supply base would be no simple task. This is because complexities build up with substantial part of innovation at P&G products coming from external sources (owing to open innovation – Connect + DevelopSM) including its supply base. Further, exporting such processes to developing countries, where small and local retailers have strong foothold and technology advances at a slower pace, remains a constant challenge.

But Harrison is all-optimistic about the success of the CDSN and sought a ‘mindset shift' towards supply network in P&G. In his words, “It's a culture shift for our sales organisation because they haven't thought about or understood supply chain capabilities. So this has been a learning curve for all of us. It's getting traction now and it's starting to go pretty well.”¹⁰

According to him, incorporating supply network as a part of ‘joint value creation plan' across the vast P&G supply network would yield tremendous benefits. He notes, “If I do something with my supply chain to reduce my customer's inventories, I want more than just the ‘supplier of the year' plaque. How do we get that value that we've created at least partially reinvested in growing our business? Do we get sharper pricing, better features,more display, better shelving?”¹¹