Emerging Digital Business Models
The past 30 years have been a massive change in P&G’s supply chain operations. Without a doubt, digital technology is being one of the biggest drivers of such transformation. According to Supply Chain 4.0 in Consumer Goods, the focus of the supply chain management role has altered to “advanced planning processes” based more on the actual demand from end consumers enabled by digital analytical forecasting and integrating operations planning.  Such demand-driven model, in which sensing and responding to demand as quickly as possible, requires manufactures to reconsider its production to shipment network design. In order to meet such demand, P&G integrated data-driven production flow of operations that significantly improved responsiveness as well as transparency.  As a result, the digital pieces of the supply chain that used to be discrete individual steps now become more holistic, real-time management of the entire ecosystem. 
End-to-end Supply Chain – From Factory to Shelf
P&G has leveraged large-scale application of advanced analytics and digital technology to excel in its ability to manage complicated global supply chain with more than 130 manufacturing sites serving over 180 countries. One of the key drivers is an “end-to-end model” that connected the siloed steps from suppliers to retailers to provide the most value to the end consumers, “with faster-than-ever response times” . The concept of integrating the whole value chain allow every stakeholders of its eco chain to minimize the unnecessary inventory as well as to speed up the system.
P&G integrates its supply chain software with its suppliers, distributors and retailers with a notion of joint business planning with key stakeholders. . To fully integrate different parts of the chain, understanding that digital automation of workflows that allows high visibility of any movement in each step is a key to enable end-to-end model. Digital automation of workflows empowered by use of algorithm-driven tools to reduce exceptions, enables end-to-end planning, connecting headquarters, manufacturing plants, distributor, and retailers. 
One highlight in logistics capability, called “Distributor Connect” connects P&G with distributors.  Digitally enabled operational program, it allows all the transportation, from raw materials from suppliers to finished goods to retailers, be accessible in one source of data, on their laptop or mobile, for the supply managers to track the status of the delivery. With enhanced real time visibility of where things move, Distributor Connect significantly reduces inventory across the ecosystem and the ‘deadhead,’ trucks not optimally utilized, by about 15%. 
Similarly, not only does P&G support with mobile-phone applications that enable retailers to check the status and order more products, it fully incorporates “GDSN,” Global Data Synchronization Network with the operation with retailers. GDSN enables 100% automated commerce without human intervention.  This capability significantly improves the human error between retailers and companies and save cost for all the parties.
Leaping for the next step to enable R&D Lab to Shelf
These ‘end-to-end’ approach, enabled by digital capabilities, allow the company to accelerate the time to deliver its products to the market. However, the implications of rising digitalization trend do not just start from manufacturing. It goes back into product innovation.  If we look at different industries, for example apparel industries, digital landscape has pushed each brand to take advantage of latest technology such as AI to realize real-time personalization. 
To truly accelerate the cycle of innovation, the company should consider the following:
- Unlocking insights through Advanced Analytics– If we can quickly identify the insights from the big data, could we capture primary demand for the manufacture without sequential researches to ‘qualify’ the products? AI will enable the company to better understand and interpret individual customers’ preferences. This will allow us to shorten the lead-time to explore different options of formulations. This approach will also significantly reduce finished goods inventory with more precise demand forecast while offering the better value proposition to the end consumers.
- Direct to Consumer –one way to shorten the lead time from manufacturing to consumers is to cut some phases of the supply chain. Rather than moving the products from factories to retailers, P&G should accelerate the development of direct to consumer supply chain from the manufacturing plants.
Questions to be answered
As we have better clarity of the current practice with digital capability, P&G will continue to face challenges including the following:
- How could the organization fully integrate the product innovation phase into the end-to-end model to meet the individual needs of end customers?
- How could a company continue to leverage economy of scale while meeting the demand from each retailer just in time?
- As digital technology is constantly evolving, how could P&G stay afloat in such transformation?
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