Business / Reengineering The Business Process At Procter & Gamble
Reengineering The Business Process At Procter & Gamble
Autor: aysha001 26 February 2013
Words: 369 | Pages: 2
CASE STUDY : 2
International Case : Reengineering the Business Process at Procter & Gamble
Procter & Gamble (P&G), a multinational corporation known for products such as diapers, shampoo, soap, and
toothpaste, was committed to improving value to the customer. Its products were sold through various
channels, such as grocery retailers, wholesalers, mass merchandisers, and club stores. The flow of goods in the
retail grocery channel was from the factory's warehouse to the distributors' warehouses before going to the
grocery stores where customers selected the merchandise from the shelves.
The improvement-driven company was not satisfied with its performance and developed a variety of programs
to improve its service and the efficiency of its operation. One such program was electronic data interchange,
which provided daily information from the retail stores to P&G. The installation of the system resulted in
better service, reduced inventory levels, and labor-cost savings. Another approach, the continuous
replenishment program, provided additional benefits for P&G as well as for its retailer customers. Eventually,
the entire ordering system was redesigned, with the result of dramatic performance improvements. The
reengineering efforts also required restructuring of the organization. P&G had been known for its brand
management for more than 50 years. But in the late 1980s and early 1990s, the brand management approach
pioneered by the company in the 1930s required rethinking and restructuring. In a drive to improve efficiency
and coordination, several brands were combined with authority and responsibility given to category managers.
Such a manager would determine overall pricing and product policies. Moreover, the category managers had
the authority to withdraw weak brands, thus avoiding conflict between similar brands. They were also held
responsible for the profit of the product category they were managing. The switch to category management
required not only new skills but also a new attitude.
1) The reengineering efforts of P&G focused on the business process system. Do you think other processes,
such as the human system, or other managerial policies need to be considered in a process redesign?
2) What do you think was the reaction of the brand managers, who may have worked under the old system for
many years, when the category management structure was installed?
3) As a consultant, would you have recommended a top-down o ...