Three billion times a day, Procter & Gamble brands touch the lives of people around the world. P&G is known for the size and strength of its portfolio of trusted brands.

DOUG RAFTERY, Vice President, Customer Business Development-North America at Procter & Gamble, serves on the Executive Advisory Board of the Grainger Center for Supply Chain Management. Raftery gave us a look at the supply chain one of the company’s best-known brands, Liquid Tide®.

Marketing and Demand Generation

“Tide® is produced according to demand rather than according to forecasts. The risks of this strategy include potential shortages or stockouts if a large retailer runs a promotion without informing us. This risk is mitigated through communication and integration between customers and P&G sales, and with sophisticated information systems, vendor-managed inventory, and continuous replenishment strategies.”

Sourcing

“Bottle quality presents a source of risk to the supply chain. The plastic molds used to make bottles and caps are expensive to replace if they break or are damaged. This risk is mitigated by developing and maintaining close relationships with suppliers and by locating production facilities next to suppliers.”

Production

“Production is the least complex part of the supply chain for liquid Tide. It is an essentially mix-and-pour process. Complexity may enter the supply chain if a retailer wants a particular mix of products for a promotion. For example, Target might specify mixed pallets of different formulations or scents (e.g., Tide Free, 2X Ultra Tide, Tide with Bleach) or different P&G products (e.g., Crest toothpaste, Charmin bath tissue, Pantene hair care).”

Distribution

“Liquid Tide® is transported from production facilities to either customer distribution centers or directly to retailers. Weather is an obvious and uncontrollable risk to on-time delivery. In addition, West Coast markets are further from the production site, so there are more risks associated with on-time delivery. Retailers on the West Coast mitigate this risk by carrying higher levels of inventory.”