Distribution structure of proctor and gamble

Distribution structure of proctor and gamble

1. Distribution Strategy Failing to aggressively challenge Lever in soaps and detergents. Project Golden Eye- The latest initiative in rationalising its sales and distribution system. Objective- Slashing the no. of distributors to one-tenth of its size. Results- Saving the cost of extensive distribution cover. P&G has rewritten its focus areas: laundry (Ariel), sanitary napkin (Whisper), and Vicks.

2. Distribution Structure

3. Infrastructure required by Distributors

4. Guidelines to be followed by P&G Distributors Audit Legal Compliance Human Rights Child Labor Forced Labour , Human Trafficking, & Employment Eligibility Wages and Hours Health & Safety

5. C&F Agents Clearing & Forwarding Agents Activities normally undertaken by a C&F Agent: Receiving goods from the factory of the company Warehousing these goods Receiving dispatch orders Arranging dispatch of goods by engaging transportation for the goods Maintaining records of dispatch of goods and stock available at the warehouse C&F agent for P&G in Delhi-NCR: Bakshi Associates Pvt. Ltd.

6. Distributors and Retailers Distributors After C&F agents transport the goods to distributors next in the supply chain Typically middlemen between the factory and the retailers Distributor for P&G in Delhi-NCR region: Amazon Distributors Retailers Distributors supply the goods to the retailers which are typically the last link between company and customers Large retailers get goods directly from company whereas small retailers from the distributor

7. Payment or credit terms given to distributors by the company standard payment terms and Credit policy for all its Distributors , major change in 2013 . I ncreased the time it takes to pay for supplies P&G’s payment terms policy is net 75 globally, where legally allowed, for all new Suppliers/ External Business Partners (EBPs) starting March 1, 2013. Implemented in phases to existing EBPs: - July 2013 as the company entered into new or modify existing agreements with largest EBPs (>$1MM in spend with P&G) – From April 2014 on a rolling basis to the rest of our EBPs

8. Payment or credit terms given by distributors in the market A payment term depends on the monthly sales of the Retailer Can vary widely depending on the scale of operations of that particular retailer. Amazon Distributor in Delhi Region able to exercise monopoly and Dictate the terms of payments as per its convenience. P&G usually has only 1 or 2 Distributors in the State – Shifting of Bargaining power for the Credit terms in favour of the Distributors

9. Problem faced by P&G Distributors

10. Points Of Conflict

11. Logistics Network

12. IT Solutions at P&G

13. Work Process Description Platform gives visibility into current inventory levels and forecasted consumption, so that stock replenishment can be managed proactively. Suppliers can automatically trigger Advanced Shipment Notification (ASN), which contains information similar to a delivery note. Gives real time information of when to expect delivery and actual quantity shipped. Once shipment arrives, a goods received notification is electronically triggered in the system. This enables three-way match of the purchase order, goods receipt and invoice, enabling timely payment of invoices.

14. Supplier Portal Suppliers have an access to online portal to check invoicing requirements and check the status of outstanding invoices at anytime anywhere. Quick view of invoice Use of Bots (Bobby) to find missing invoices See payment reports Get access to all P&G vendor codes Reduces number of touchpoints for payment issue realization

15. Supply Chain Management Product Age at Retailer’s End- 15-60 days Number of Distributors- P&G only has one distributor in Delhi NCR region Distribution Strategy- Pull based strategy is followed by P&G and the company follows up on demand generated for its products. Each distributor does a business of about 65- 70 crores with an ROI in excess of 25% No End of the Month Invoicing- If the retailer has sold two units of stock out of 10, then the company will supply him with just 2 units. Working Capital and Space Needed- Minimum as distributors have just a day’s inventory to stock. Replenishment- Continuous replenishment as P&G has JIT system at distributor level and at retailer level.