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Page history last edited by Tara Kerr 12 years, 10 months ago

 

 

 

 

Nina Brownstone

Tara Kerr

Liang Yu

Keith Reynolds

  

 

Company Overview

 

     Known as the nation’s largest producer of household and consumer goods, Proctor and Gamble is continuously searching for new ways to implement information technology into their business processes.  Founded in 1837 in Cincinnati, Ohio, Proctor and Gamble has established themselves as a well known, Fortune 500 Company.  Proctor and Gamble separates their products into three main categories: beauty, health and well being, and household care.  Information technology is used in the production and shipping of each product no matter the segment they are a part of.  P&G produces over two dozen billion dollar products and holds on-ground operations in over 80 countries around the world (4).  Aside from their products, Proctor and Gamble created their brand image by focusing efforts on the satisfaction and privacy of each individual customer.  In their privacy policy it is stated, “P&G uses technology in order to better serve our consumers, customers, employees, and others. We tell individuals when we use technologies that are privacy related. We do not use internet cookies to collect or store personal information. We actively promote best privacy practices and consumer benefit for emerging technologies that may have an effect on privacy, such as radio frequency identification tags used to manage product inventory” (8).

 

Information Strategy

 

     Proctor and Gamble seeks to maintain their positive, innovative image through the continuous use of the most up to date technologies.  With globalization as their main goal, top management at Proctor and Gamble is striving to turn innovation into commercialism faster than any of their competitors.  In order to implement the most recent technologies in the most effective and efficient manner, employees at all levels are involved in the process.  They must be motivated and willing to move with changing business developments in order to help Proctor and Gamble continue its success (5).

 

     Proctor and Gamble has implemented the following IT initiatives in order to maintain a competitive advantage within its industry: AskMe Enterprise, Axway's MFT Solution, SAP's ERP systems, and Global Business Services. The remaining parts of the wiki detail the initiatives and explain the situations that prompted the company to adopt them.

 

AskMe Enterprise 

 

     One of Proctor and Gamble’s greatest strengths is its pool of skilled employees.  P&G employs over 135,000 people around the world, including 9,000 Research and Development associates with over 1,100 PhDs.  The R&D organization is fluent in a broad range of subjects including chemistry, engineering, science, medicine, and math.  According to a Delphi Group study, “nearly 88% of a company’s knowledge resides in the minds of its employees” (5). This is fact holds true for P&G and their highly skilled labor force.  However, prior to 2001, the company lacked a system that enabled them to tap into their employee’s knowledge - one of their greatest resources was not fully being used.

 

     P&G first established a Dubbed Innovation Net, an employee portal that facilitated collaboration among workers involved in product development (7).  This innovation net was useful because it provided employees access to published information about documents, data, and reports.  But, it did not connect people to the most valuable type of information that P&G had – the knowledge of their top employees.  In 2001, P&G acquired a knowledge sharing software called AskMe Enterprise to transform departmental experts into tangible information resources for the whole company (7).

 

     AskMe Enterprise by AskMe Corporation “provides an innovative solution to leverage organizational knowledge to reduce re-invention, contain costs, shorten project cycle times and increase innovation” (1).  P&G acquired AskMe Enterprise to strengthen its innovation net and to obtain employee knowledge.   AskMe is an intranet site that facilitates collaboration, brainstorming, and idea generation among subject matter experts; it “reaches 18,000 key knowledge workers in P&G as well as in departments such as R&D, Engineering, Purchasing, Consumer and Market Knowledge, and Knowledge Sharing” (5).  With AskMe Enterprise, employees can “identify qualified individuals with relevant expertise, submit questions or business problems to individuals and receive solutions from colleagues in order to take appropriate and effective actions” (5).  To maximize efficiency, problems and solutions that have been submitted through AskMe are saved in the database so that they can be referenced in the future.  There are two main benefits of this: the ability to analyze the affects of past solutions and the ability to share the knowledge with other employees who have similar information needs.

 

 

AskMe Enterprise - Knowledge Networking That Empowers Knowledge Workers (1)

 

 

     P&G’s implementation of AskMe Enterprise was a huge success.  The pilot employment went smoothly and showed improved ROI results, so management was easily persuaded to fully invest.  The biggest challenge for P&G was integrating the new system with employee’s day to day tasks.  P&G management wanted to ensure employees would react favorable to the system, so they “spent a lot of time on marketing, conversations, and meetings to show how the product could help workers” (7).  The tangible benefits of the system caused employees to agree to adopt the system.  There is an implicit reward system is built into AskMe Enterprise that the employees like.  The more active the employee is in a particular area, AskMe will highlight them as a featured expert.  This makes employees want to participate in the system because “people in the innovation area enjoy being seen as an expert, [and this system] gives them a lot of personal satisfaction” (7). 

 

Axway Solution

 

      Procter and Gamble’s profitability depends heavily on the efficiency and effectiveness of its supply chain. As a result, it is crucial that the company adopt the best available technology to safe-guard its supply network (11). In June of 2009, Procter and Gamble began use of a new system to improve file transfers that support its supply chain. File transfers are an integral part of any supply chain because they facilitate the communication of online information with partners, suppliers, and customers (2). The new system adopted by Procter and Gamble was Axway’s business to business solution for externally managed file transfers (MFT). The company believed the system would enhance its all ready effective Supply Chain Management (SCM).

 

      Managed File Transfer (MFT) refers to software solutions that ensures the secure transfer of data from one computer to another over a network such as the internet. It is built using file transfer protocol (FTP), but it eliminates some of the disadvantages associated with FTP—specifically a lack of visibility and security. If MFT did not exist, companies would have to rely on unsecure FTP or expensive dedicated networks and proprietary software to transfer information. MFT is clearly a low cost and high quality solution for file transfers.

 

     Procter and Gamble’s decision to implement Axway’s MFT system will certainly improve file transfer processes within its supply chain. To begin, the system offers P&G real-time visibility and control over transfers. It allows the company to know exactly where files are at all times and when files move in and out of the enterprise (2). This visibility and control will facilitate communication within and outside the company and provide the agility needed to react to changes in the supply chain (2).The system also offers a broad array of security measure to prevent data loss and improve governance. These measures include complete audit trails that guarantee compliance with industry and government regulations (2). Lastly, Axway’s system provides Procter and Gamble with powerful community management: it improves risk and increases customer satisfaction by creating connections that streamline how the company manages, obtains supplies, and interacts with trading partners (2).

 

The Axway system used by Procter and Gamble also offers the following benefits:

 

  •  Automates manual processes to enhance efficiencies and reduce cost (11)
  •  Consolidates different MFT communications into a single framework (2)
  • Easy on boarding of new partners no matter their technical capabilities (allows P&G to partner with more organizations and enhance their competitive advantage) (2)
  •  A peer-to-peer network with active dual site failover to ensure supply chain remains in constant operation (11). Failover refers to switching to a standby computer system, server, or network upon failure of a different application, system, server, or network.

 

     P&G uses Axway’s system to transfer orders, invoices, shipment notifications, and other messages to partners in the supply chain (2).The system handles more than one million file transfers per month, and overall, optimizes the company’s relationships with trading partners. According to Axway’s chief technology officer, Dave Bennett: "Today, smart companies are creating a co-innovation infrastructure to enable higher-level innovation. Procter & Gamble is a leader in this, leveraging their relationships with partners and other companies, improving success rates with aggressive sustainability and product innovation goals, while realizing increased cost savings" (11). Procter and Gamble is a leader in SCM, and the recent addition of Axway’s MFT solution will only further improve its supply chain infrastructure.

 

 

P&G's Commitment to ERP with SAP

 

     Procter & Gamble has one of the strongest portfolios of consumer products brands, which includes Pampers, Crest and Gillette. The P&G community consists of almost 135,000 employees working in over 80 countries worldwide. P&G’s size has made the need for an effective and efficient ERP system even more imperative. Therefore, P&G has turned to SAP’s well established ERP system services (5).

 

     Procter & Gamble’s global IT strategy with SAP stems from its need for a standardized software platform. P&G, a consumer goods manufacturer, signed a global enterprise agreement with SAP.  The global enterprise agreement includes strategic software developments, software and maintenance, SAP support and high-profile consulting services. P&G has been using SAP solutions for core business processes such as finance and supply chain management. With the GEA, P&G focuses on the creation of a global IT strategy, making the development of a standardized software platform for the P&G crucial. The goal is to integrate existing IT systems into this platform and to implement future SAP business solutions globally. The result will be a lower total cost of operations and increased value across P&G’s extended business network (9).

 

      Procter & Gamble has focused on emphasizing supply chain management as a core competency, which has made P&G one of the top three companies ranked in the "Top 25 Supply Chains". While it wins industry accolades, P&G has continued to invest in improving its supply chain performance. Mark Kremblewski, a Toronto-based global business expert working on demand planning at Procter & Gamble, says that the company's decision to tackle the short-term forecast challenge stemmed from the realization that P&G needed to do additional work to reduce its inventory levels (9). The project also offered an opportunity to produce a measurable, verifiable return on investment.

 

     P&G's demand planners focus on both short-term horizons (one to six weeks) as well as medium- to long-term horizons (seven weeks to two years) in their forecasts, using the demand planning capabilities within P&G's SAP enterprise resource planning (ERP) solutions. P&G's internal analysts also use Excel spreadsheets and internally developed applications to work with data pulled from shipping and billing systems on a daily or weekly basis, adding in forecast accuracy data, which without SAP’s ERP systems would otherwise be a tedious, time- and resource-consuming process. Procter & Gamble has estimated that employing and integrating new information technology system solutions ultimately can yield more than $100 million in increased cash flow globally for P&G (9).

 

In utilizing ERP, P&G seeks to adhere to the following values and principles as guidance:

 

  • Be opportunistic. Take advantage of technology to deliver measurable results and return on investment.
  • Be selective. In rolling out a new solution, identify the best business unit, functional group or facility for the pilot to ensure that the solution will have a significant, verifiable impact that can serve as an example for future deployments.
  • Be collaborative. When rolling out new technologies that affect other functions and supply chain partners, earn their buy-in by involving them in the process early, marketing the potential benefits, and helping them gain confidence in the solutions.
  • Be prepared. When a new solution requires connections to existing enterprise systems, do your homework to learn which systems will be affected, what data you'll need (and what the quality of the existing data is) and how the systems will connect.

 

     P&G has aggressively pursued increased standardization on SAP's ERP systems. Procter & Gamble uses SAP in over 80 countries and its CIO has moved the two companies' collaboration ever closer. P&G ramped up its SAP-based IT standardization program. The household goods manufacturer already uses SAP across its 80 countries of operation, but has signed a global enterprise agreement to bring the two firms' collaboration closer (5). In 2008, P&G chief information officer Filippo Passerini said that the company had dramatically improved its dialogue and long term business plans with IT suppliers, resulting in strong improvements in collaborative results (5). The company has now said it will cut costs, drive growth in its business and innovate more as a result of the agreement with SAP, which covers software, maintenance, software development and consulting. It will also be able to more easily and quickly develop SAP-based software and standardize it across the business. P&G uses SAP enterprise resource planning, supply chain and financial software. Other key implementations of SAP's integrated services into P&G's business process include information databases and customer relationship management software. Passerini believes the agreement would "step-change innovation in business services and enhance the efficiency of our core business operations" (5).

 

Global Business Services (GBS)

  

     Prior to 2003, Procter and Gamble relied on a functional (silo) perspective for business processes and its information strategy. As a result, there was a significant amount of duplication, and the company lacked a clearly defined central repository for information.  In 2003, the company decided to make a change. It began with its decision to turn over half of its IT function—mainly the basic maintenance processes—to Hewlett Packard (12). The company then reorganized its remaining 4,000 IT employees by consolidating all IT units into a single department renamed Information and Decision Solutions (IDS) (12).   This move was part of a larger company initiative to consolidate back office functions (e.g. accounting, human resources, and IT) into one unit, Global Business Services (GBS) (3).The implementation of GBS represented Procter and Gamble’s decision to shift away from a silo organizational structure towards a shared services model that employs horizontal integration. This Horizontal integration saved Procter and Gamble around $600 million (3).

 

     IDS is just one of the many shared services that are a component of GBS.  By consolidating all IT units into IDS, the company created an integrated IT platform and centralized and digitized the many documents located among different business units (12). Prior to IDS, emails, letters, and reports were located in piles of paper on different manager’s desks across the corporation (12). IDS centralized this data, which made information available to all divisions and improved communication. It also made it easier and quicker to access important documents. 

 

     In addition to centralizing data, Procter and Gamble’s horizontal integration initiative focused on consolidating key processes into “decision cockpits" (12).  For example, P&G utilized SAP’s ERP and SCM applications to create a sales order cockpit, which is a single monitor that supports all activities related to a sales order (10). The cockpit executes tasks such as committing to delivery dates, dealing with availability–to promise and allocation issues, expediting deliveries, checking credit limits, obtaining sales approvals, and moving materials to new locations (10). These cockpits present real-time information in visual form, and employees can efficiently refine what they are shown so that only the most important information is displayed (12).

 

      The following video features a Procter and Gamble executive speaking on the benefits of “decision cockpits.” He specifically focuses on the sales order cockpit created with the help of SAP:

 

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Discussion Questions

 

1. How does AskMe Enterprise increase the efficiency and effectiveness of P&G’s employee networking?

2. What are the advantages of adopting a shared services model?

3. What does P&G seek to accomplish in its partnership with SAP?

4. What role does ERP play in P&G's daily operations?

 

 

 

About Us!!

 

  • Keith Reynolds
    • Hometown: Holden, MA
    • Major: Finance
    • Fun Fact:  Plays the trombone in the Villanova Band
  • Nina Brownstone
    • Hometown: Westfield, NJ
    • Major: Marketing
    • Fun Fact: Lived in Switzerland
  • Liang Yu
    • Hometown: Gaithersburg, MD
    • Major: Finance
    • Fun Fact: 10 years of Martial Arts
  • Tara Kerr
    • Hometown: Howell, NJ
    • Major: Marketing & IB
    • Fun Fact: 10 years of Irish Dancing

 

________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

References

 

1. AskMe Solutions . (2009). Retrieved March 12, 2010, from AskMe Realcom The Knowledge Expert : http://www.realcom-inc.com/product/default.asp

 

2. Axway. (2009, June 9). Procter & Gamble Employs Axway Solution to Ensure Supply Chain Efficiencies and Cost Management. Axway Press Release. Retrieved from http://www.axway.com   /press-releases/2009/procter-gamble-employs-axway-solution-ensure-supply-chain-efficiencies-and-cost-

 

3. Bloch, M., & Lempres, E.. (2008). An interview with Filippo Passerini. The McKinsey Quarterly,(4), 14.  Retrieved March 16, 2010, from ABI/INFORM Global. (Document ID: 1585897421).

 

4. Corporate Watch. (1996). Retrieved March 11, 2010, from Proctor and Gamble: http://www.corporatewatch.org/?lid=247

 

5. How Procter and Gamble Survived Through Innovation – A Case Study. (2009). Retrieved March 11, 2010, from Knol : http://knol.google.com/k/how-procter-and-gamble-survived-through-    innovation-a-case-study#

 

6. King, Leo. (2008, October 30). P&G Ramps Up Standardization on SAP's ERP. CIO, Retrieved from http://www.cio.com/article/458097/P_G_Ramps_Up_Standardization_on_SAP_s_ERP_Supply_Chain_and_Finance_Apps 

 

7. Moore, C. (2001, October 12). Tapping Knowledge. Retrieved March 14, 2010, from InfoWorld: http://www.realcom-inc.com/pdf/InfoWorld_PG.pdf

 

8. Proctor and Gamble. (2010). Privacy. Retrieved March 11, 2010, from Our Global Privacy Policy: http://www.pg.com/en_US/sustainability/point_of_view/privacy.shtml

 

9. Reese, Andrew K. (2007, February/March). Planning to Succeed at Procter & Gamble. Supply & Demand Chain Executive, Retrieved from http://www.sdcexec.com/publication/article.jsp?pubId=1&id=9274&pageNum=1

 

10. SAP (2009). Procter and Gamble Building a Sales Order Cockpit Using Community Definition Groups and Enterprise Services. SAP Ecosystem in Action Success Story. Retrieved from http://www.sap.com/usa/ecosystem/customers/customers/index.epx 

 

11. Shanbhag, R. (2009, June 11). Axway Solution Helps P&G to Improve Supply Chain Efficiencies and Cost Management. TMCnet. Retrieved from http://small-business-voip.tmcnet.com/topics/smb-voip/articles/57772-axway-solution-helps-pg-improve-supply-cha-efficiencies.htm

 

12. Sloane, J.  (2007, March). Business As Unusual. Popular Science, 270(3), 50.  Retrieved March 16, 2010, from Research Library. (Document ID: 1211854931).

 

 

 

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