Case Study of Procter and Gamble (P&G): Structure and Culture
Three billion times a day, P&G brands touch the lives of people around the world. This happens because Procter and Gamble P&G provides branded products of superior quality and value to improve the lives of the world’s consumers.
P&G has a long history of positive engagement with its suppliers and sees SRM as a natural extension of this. P&G’s SRM program was established to provide a rigorous methodology for managing supplier relationships, to deliver sustained business results over time.
P&G’s policies made the company a unique one that respects governments and law, respects the workplace, and respects the marketplace.
This has essentially meant operating in new geographies and new markets, with new products and new services. It has required our SRM work and thinking to evolve – from an increased need to focus on the most important relationships, to the development of new relationships in emerging markets and new industries, and to the creation of new business models, particularly in the services area.
Given the size and scope of P&G’s global business, we clearly have to work at effectively managing our complex supplier relationships. These relationships, which touch P&G in many ways, need solid linkages, constant communication, good systems, clear measures, and resources that can effectively coordinate both strategic direction and day-to-day issues over time
Relationships are about people and can easily be affected by personnel changes, shifts in business direction, and miscommunication. Ensuring strong leaders are in place to guide the overall relationship is critical to ensuring both parties are getting their needs met.
P&G focuses on five core strengths required to win in the consumer products industry. We are designed to lead in each of these areas. Innovation is one of these core strengths and is the lifeblood of our company.
P&G is the innovation leader in our industry. Virtually all the organic sales growth we’ve delivered in the past nine years has come from new brands and new or improved product innovation.
Our SRM methodology clearly addresses managing risk and relationship dynamics – i.e. changes in business fundamentals, and changes or issues in the health of a relationship. We focus on tools and assessments which provide early warnings and strategically engage our business partners in proactively managing change.
P&G is consistently the preferred customer or the partner of choice, and many of our external business partners will dedicate their best talent to managing our business, bringing innovations to P&G first, and investing in our mutual success.