Procter And Gamble Case Study

Register to read the introduction… Generally the higher the production output of the firm, the lower the unit cost of their product will be. Besides output volume, the speed of production will determine the lead time from manufacture to delivery. High productivity will enable manufacturing firms to achieve shorter production cycles which equates to better competitiveness in their respective markets. Capacity management will determine how efficient the manufacturer will be in producing its goods. Over capacity will result in increased wastage and costs while under capacity will see the firm lose certain profits that it should gain. Thus manufacturers needs to carefully consider the type and amount of capacity needed for its production when doing its supply chain …show more content…
the case study on Procter & Gamble (Bozarth & Handfield, 2006: Pg 91-92) is a good example of how a manufacturing firm leverages on their supply chain to improve on their effectiveness and lowering cost. Procter & Gamble used to operate under five different business sectors according to different product lines such as paper goods and healthcare products in the mid 1990s. Originally this makes good sense to Procter & Gamble to better manage its’ diverse business. However for the retailers and customers of Procter & Gamble who is purchasing with all the different five entities, it also meant different order processing, invoicing and deliveries when at the core the five entities are all under the same company. For Procter & Gamble it also a logistical nightmare as they faced issues with high volume of orders which resulted in errors, inefficient deliveries with many trucks delivering to the same customer with less than truckload full and inefficient invoicing by the different entities to the same customer. After Procter & Gamble redesigned the information and physical flows across their five entities, their customers only need to deal with one entity for all its product range and logistical process. The end result is a win-win situation where Procter & Gamble increased its profitability through cost savings and increased customer satisfaction. Their customers also gained with the …show more content…
In view of such, supply chain management to manufacturing firms are of utmost importance if they wish to compete in today’s ferociously competitive markets. Besides making and selling a product, manufacturing firms need to manage and leverage on supply chain strategically in order to gain competitive advantages. As a result of globalisation and rapid technological changes, manufacturing firms needs to constantly focus on supply chain management to align their internal operations with their external