Operations Management: Procter N Gamble

OPERATIONS MANAGEMENT: 2008

Submitted to: Dr. Hayat Mohammad Awan

:TERM PAPER: PROCTOR N GAMBLE COMPANY

OPERATIONS MANAGEMENT

Submitted by:

Mahwish Malik MBA- I 3rd semester

Page 1

OPERATIONS MANAGEMENT: 2008

I DEDECATE THIS REPORT TO ALL OF MY

FAMILY

MEMBERS WHO SUPPORTED ME IN EVERY WAY OF LIFE AND DID NOT LET ME DOWN

& ALL WELL WISHER’S

Page 2

OPERATIONS MANAGEMENT: 2008

Page 3

OPERATIONS MANAGEMENT: 2008

ACKNOWLEDGEMENT I have the only pearl of eyes to admire the blessing of the Compassionate and Omnipotent because the words are bound, knowledge is limited and time is short to express His dignity. All thanks are due only to Almighty Allah, most gracious, the most merciful, who gave me the strength to do this job. My special praise for Holy Prophet Muhammad (Peace Be Upon Him) who is, for even humanity as a whole. It is a matter of great honor and pleasure for me to express my ineffable gratitude and profound indebtedness to my venerable supervisor and Head of IMS Dr.

Hayat Mohammad Awan, for his kind supervision, valuable suggestion and sympathetic attitude through my research. I am much impressed of his intellectual activities, inexhaustible energy to steer forth the student. His sympathetic and sincerest attitude is highly qualified experience.

Page 4

OPERATIONS MANAGEMENT: 2008

Executive Summary The boundaries that define competition are subject to environmental changes such as technological advances or evolving consumer preferences (Day, Shocker and Srivastava 1979). As competitive boundaries fluctuate, competitor can emerge from new or unanticipated product categories. The world of today as becomes global village, changes travel instantly from one part of globe to the other due to technical advancement and state of the art technology like computer, internet, etc. The businessmen of today have to confront with multifarious challenges and coop with hyper competitive environment with ever increasing threats from unknown directions. To survive in this environment we have to come up with new products with attributes compatible or superior to that of the competitor. For becoming market leader they would require extra ordinary marketing & management skills. They will have to maintain their brand image and ensure that customers remain hardcore loyal to their brand, for this purpose they should add extra value and more satisfaction with reasonable cost. In order to capture more and more market share they should conduct extensive research of the market and spend handsome amount on developing innovative and quality products. Also enhances competitive advantage and capture maximum market share. For capturing sand maintaining maximum market share and to remain market leader the marketing manager should have a very efficient supply chain management system. Marketing mix strategy should be reviewed periodically to remain abreast with latest trend, changes, and consumer preferences prevailing in the market. They should devise effective messages, communication channel, and allot suitable promotion budget. As the customer trends are changing components of promotion mix should be selected carefully and focus on sales promotion rather than advertising. Marketers should not aim on one time profit rather they should plan for maintaining strong loyal customer’s base. This will result in repeat sales. The management of P&G are following all these techniques and ethics in order to their competitive advantage, capture maximum market share, remain market leader, provide maximum value and satisfaction to customers and established abroad base of hardcore loyal customers. So far so good they have succeeded.

Page 5

OPERATIONS MANAGEMENT: 2008

Page 6

OPERATIONS MANAGEMENT: 2008

Procter & Gamble

Q: How many times has Procter & Gamble touched YOU?

Procter & Gamble touches people’s lives over two billion times every day!

Page 7

OPERATIONS MANAGEMENT: 2008

HISTORY: Established in 1837, The Procter & Gamble Company began as a small, family operated soap and candle company in Cincinnati, Ohio, USA. Today, P&G markets almost 300 products to more than five billion consumers in 140 countries, Pakistan being one of them.

1837

Brothers-in-law William Procter and James Gamble start a partnership, making and selling candles and soap in Cincinnati. Neither William Procter nor James Gamble ever intended to settle in Cincinnati. Although the city was a busy center of commerce and industry in the early nineteenth century, William, emigrating from England, and James, arriving from Ireland, were headed farther west. Despite their intentions, however, both men ended their travels when they arrived at the Queen City of the West—William took care of his ailing wife, Martha, who soon died, and James sought medical attention for himself. William Procter quickly established himself as a candle maker. James Gamble apprenticed himself to a soap maker. The two might never have met had they not married sisters, Olivia and Elizabeth Norris, whose father convinced his new sonsin-law to become business partners. In 1837, as a result of Alexander Norris' suggestion, a bold new enterprise was born: Procter & Gamble. On April 12, 1837, William Procter and James Gamble start making and selling their soap and candles. On August 22, they formalize their business relationship by pledging $3,596.47 apiece. The formal partnership agreement is signed on October 31, 1837.

1859 P&G sales reach $1 million.

1879 The inexpensive, but high-quality Ivory soap is introduced

Page 8

OPERATIONS MANAGEMENT: 2008

1924 P&G is one of the first to create a market research department to study consumer preferences and buying habits

1955 Crest, the first toothpaste with fluoride clinically proven to fight cavities, is introduced

1961 Pampers is introduced and eventually replaces cloth diapers

1980 Sales reach $10 billion

2003 P&G operates in 80 countries worldwide, employing 98,000. Have 13 billion dollar brands in its portfolio: Charmin, Tide, Pantene, Iams, Folgers, Crest, Olay, Always, Ariel, Bounty, Downy, Pringles, and Pampers $43.3 billion in net sales in 2003.

2004 P&G's Safe Drinking Water Program wins the World Business Award from the United Nations Development Program & International Chamber of Commerce in support of the UN's Millennium Development goals. Actonel is P&G's newest billion-dollar brand, and the first pharmaceutical brand to reach this important milestone.

2005 P&G and Gillette merge into one company and add five more Billion Dollar Brands to our product portfolio including Gillette and Braun's shaving and grooming products, the Oral-B dental care line and Duracell batteries.

Page 9

OPERATIONS MANAGEMENT: 2008

HISTORY SO FAR IN PAKISTAN: Procter & Gamble started its operations in Pakistan in 1991 with the goal of becoming the finest global local consumer goods company operating in Pakistan. It has first launched Camay and Head & Shoulders. With commitment came growth, and in 1994 we acquired a soap-manufacturing facility, a sprawling 7-acre land at Hub, Balochistan. Over the past nine years, the plant achieved state-of-art manufacturing technologies and quality assurance processes. With a recent strategic investment of 5 million dollars, the bar soap production capacity jumped three-fold. As a company we have always believed in the potential Pakistan has as a country and a nation to develop and excel. No wonder P&G Pakistan, within the last 12 years, has reinvested over $100 million in Pakistan and has contributed close to seven billion rupees to the Pakistani government's revenues over the last 5 years in the form of sales tax, customs and excise duties. That is also why 99% of the jobs that P&G Pakistan creates in Pakistan are held by Pakistanis. All this makes P&G a more locally involved company than many companies actually headquartered in Pakistan. Since the inception of P&G Pakistan, we have always committed ourselves to business growth, consumer satisfaction and community development. Thanks to our committed base of employees, customers, vendors, stakeholders, and above all, consumers, today we are one of the most thriving operations in Pakistan. We proudly celebrate being a part of the Pakistani way of life.

P&G BACKGROUND: P&G Pakistan is a subsidiary of the Procter and Gamble Corporation, the leading consumer goods company with a mission to improve the lives of consumers wherever it operates. P&G is an international Company reaching out to almost the entire world population with more than 250 brands in 130 countries. Many of these world brands (Ariel, Tide, Pert Plus, and Pantene Pro-V, Head & Shoulders, Pampers and Always) have become famous household names and are found in almost every home. Headquartered in Cincinnati-Ohio in the USA, P&G has local operations across the globe in more than 80 different countries, including numerous manufacturing sites and 18 R&D-technical centers. P&G is an internationally

Page 10

OPERATIONS MANAGEMENT: 2008

owned company with publicly traded shares, currently owned by over one million shareholders from around the globe. P&G employs over 100,000 people from all over the world, spread evenly between 1-USA, 2-Europe/Middle East and Africa and 3-Latin America/Asia. P&G hires and respects individuals regardless of race, color, religion, gender, age, national origin, citizenship or disability, and actively promotes diversity within its organization as well as in its business operations.

P&G GOALS: P&G's goal is simple - "To create the most successful global brands in every category everywhere we compete. And we have the strength to do it"

PURPOSE, VALUES & PRINCIPLES: Our core values and principles guide us in everything we do. Learn more about what drives our purpose of providing products and services of superior quality and value to the world's consumers.

Page 11

OPERATIONS MANAGEMENT: 2008

GLOBAL BUSINESS: The P&G community consists of nearly 98,000 people working in almost 80 countries worldwide. What began as a small, family-operated soap and Candle Company now provides products and services of superior quality and value to consumers in 140 countries.

STRONG BRANDS: Our company has one of the largest and strongest portfolios of trusted brands, including Pampers, Tide, Ariel, Always, Pantene, Bounty, Folgers, Pringles, Charmin, Downy, Iams, Crest, Actonel and Olay.

ORGANIZATION HIERARCHY:

Page 12

OPERATIONS MANAGEMENT: 2008

ORGANIZATION HIERARCHY MULTAN:

PRODUCT LINE

In July 1997, Ariel was launched in Pakistan based on a sophisticated and advanced formula. Its breakthrough formula was warmly welcomed by the Pakistani consumers. Thanks to the use of latest detergent technologies, the new Ariel is able to deliver great end-results on cleaning and whiteness maintenance.

Page 13

OPERATIONS MANAGEMENT: 2008

New Ariel delivers against one of the key Pakistani consumer needs: a detergent that could give spotless cleaning to both colored and white clothes. This is because new Ariel contains a unique double action system, which gets fully dissolved unlike bar soap. The green speckles penetrate deep into the fabric to help remove tough stains. The blue speckles give shine to your whites and brightness to your colored clothes.

Procter & Gamble is one of the world’s largest manufacturers of products for feminine protection. In 1984, P&G introduced the Always line of feminine hygiene pads onto the USA market and it rapidly became the global market leader. In 2001, Always was successfully introduced in Pakistan to be the first advanced hygiene pads in the market, representing a milestone in the progress and development of Pakistani women. As in many Muslim societies, women in Pakistan are concerned about their cleanliness and hygiene during menstruation. But unlike the former, Pakistani women have been behind in using proper hygiene protection. Only 9% of women in urban Pakistan use disposable pads, the remaining use cloth and other home made means of protection. The key reason behind this is the prior existence of low quality products in the market.

Page 14

OPERATIONS MANAGEMENT: 2008

Consumer research shows the following hierarchy of needs for menstrual protection: 1. Protection and reliability 2. Comfort and discretion 3. Convenience 4. Economy The Always line up ensures that women are provided with a product that fits with their expectations and needs in Pakistan. The Always thick pad is a traditional pad and contains normal fluff pulp in the core for absorption. The Always ultra pad is a super thin pad that contains a highly absorbent material that can absorb several times of its own weight in fluid and convert it to gel. The fiber-webbed distribution layer encourages rapid dispersal of the fluid before it comes in contact with the absorbent core. The polyethylene back sheet stops fluid from passing through the pad. The adhesive stripes on the back sheet are made of special glue that holds the pad securely on the panty. Wings wrap smoothly around the panty, holding it in place, and prevent soiling. The quick wrap packages allow women to carry unused pads discretely and dispose of used pads hygienically. Always marks a breakthrough in the lives of Pakistani women and has revolutionized the concept of feminine protection. The ease and comfort it provides during those awkward days has managed to bring about a sense of freedom, mental security and peace for women.

Page 15

OPERATIONS MANAGEMENT: 2008

In 1926, the world was introduced to the finest and most sophisticated of luxuries Camay; and in 1994, the pleasure was brought to Pakistan. Different in its very essence, defining beauty in a totally different way from other soaps, Camay stands apart in a league of its own. Camay is not just soap; it is a feeling - of beauty from within. In a world short of time, Camay is about finding time and pampering yourself. The person that resides inside needs importance and attention. Camay is for spoiling you, because "you" are the most important person in your life.

Head & Shoulders is the world's leading Anti Dandruff shampoo. It has been awarded "the best Anti Dandruff shampoo" by many medical associations including US dermatologists. In Pakistan, H&S has a 65% market share of Anti Dandruff shampoo segment. It has consolidated this position since the new Renaissance launch. The new, best ever formula for Head & Shoulders contains extra moisturizers which clear away dandruff and also leave hair looking beautiful.

Page 16

OPERATIONS MANAGEMENT: 2008

Dandruff and Related Scalp Conditions There's really no need to feel uneasy about having dandruff - all you need is the right solution. Head & Shoulders® has been providing that solution for more than 35 years, as well as leaving hair manageable and looking great. We've offered some information here on dandruff and related scalp conditions to help you understand them better.

Use Head & Shoulders! The good news is that dandruff can be fought and even prevented. Head & Shoulders has a new line of shampoos, 2 in 1 formulas and conditioners to help you fight dandruff and leave your hair manageable and looking great.

First launched in the essential part of many women's' lives.

1950's, Olay rapidly became an

Today the brand is enjoyed by 70 million women worldwide and it continues to add new products which enhance women’s' natural beauty. Oil of Olay was launched in Pakistan in 1992. With its superior moisturizing quality and added UV protection, it has become a preferred moisturizing lotion for women in Pakistan. Women love it because it leaves the skin fresh and glowing.

Page 17

OPERATIONS MANAGEMENT: 2008

In August 2000, Procter & Gamble launched Pampers in this country in Pakistan. Local consumers now benefit from this globally renowned product that is approved by standards of the Human Safety Reassurance Program and also endorsed by the International Society of Pediatricians. Imported from Saudi Arabia, Pampers is packed locally and aims to provide a better parenting experience to Pakistani mothers. The special feature of Pampers is the new diaper core design including a new dual acquisition system which helps to improve the condition of baby's skin through a better dryness performance. The Pampers core takes in urine from the diaper surface after loading. Fast acquisition minimizes baby's contact time with the skin. A homogeneous blend of cellulose and a very absorbent material result in efficient distribution of the GM. The storage technology locks the urine away so that it cannot return to the baby's skin. Leg elastics, barrier leg cuffs and the waist shield are added to provide greater leakage prevention. The fastening strips allow the diaper to be refastened over and over again. Balsam lotion on the top-sheet provides comfort and moisturizing to baby’s skin, each time he moves.

Page 18

OPERATIONS MANAGEMENT: 2008

Laboratory and use tests confirm that Pampers provides an outstanding level of dryness and is significantly superior to cloth and other diapers under all conditions. Consumer research shows that Pampers has made considerable head way in generating trial and conversion amongst cloth using mothers, who feel that Pampers has helped in bringing about a difference in her babies life and also her own. Consumer confidence is further validated by the fact that Pampers currently had 75% market share in Pakistan and has managed to more than double the market size since its launch.

The Pantene Pro-V line of shampoos is the best selling shampoo and conditioner system in the world loved by women in more than 100 countries. Pantene has always been on the cutting edge of hair care technology being the shampoo that provides solution to different types of hair problems. Pantene was launched in Pakistan in 1995 and currently every 6th female shampoo user uses Pantene for her hair care needs. Pantene in Pakistan has 5 variants that provide solution to different hair problems as below:

Products Type

Page 19

Attributes

OPERATIONS MANAGEMENT: 2008

Variant: Smooth and Silky Label Color: Green Benefit: Shine for dull hair

Variant: Extra-Treatment Label Color: Dark Blue Benefit: Prevents split ends

Variant: Anti-Dandruff Label Color: Light Blue Benefit: Dandruff Control

Variant: Deep Black Label Color: Black Benefit: Shine for dull hair

Variant: Clarifying Label Color: Silver Benefit: Residue removal

Page 20

OPERATIONS MANAGEMENT: 2008

Variant: Golden Protection Color: Gold Benefit: Intensive care for dry/damaged hair

Pert Plus Shampoo + Conditioners-Good News from the Shower! Hair's just dead stuff on your head, right? Well, yeah, on some people it looks like that. But not you. Not after you've lathered, rinsed and repeated with Pert Plus Shampoos and their awesome clean conditioning technology. What's that, you ask? It's the unique way Pert Plus works. It cleans, conditions, and then it gets outta there. It doesn't hang around to weigh hair down. No waxy residue. No build-up. None of those listless, slacker follicles. It's water-based, so hair rinses clean. Suddenly hair is shining and lively-looking. Dare I say it's billowy? Yes. Thanks to a shampoo that knows when to quit.

Pour some in your hand. Doesn't it feel rich and luxurious? Smell it. The scent is sublime. Best of all, Pert Plus Shampoo never builds up. It doesn't know how. The excess just washes away. So your hair feels clean and full and looks great all day.

Page 21

OPERATIONS MANAGEMENT: 2008

Attribute

Product Type

Original

What would life be without American icons? We're talking' about blue jeans, soda pop, and, of course original Pringles in that famous red can. What are you waiting' for? Open a can and bite into a classic. Also available in 50-gram and 100-gram cans.

Paprika

Add some spice to your life. Shake up a can of Pringles Paprika crisps!

Barbecue

Yeehaw! Got a taste for tangy BBQ flavor? Then pop open a can of Barbeque Sauce and transport yourself to the Old West.

Page 22

OPERATIONS MANAGEMENT: 2008

Salt and Vinegar

Wanna see your tongue do back flips? Seriously, grab a stack of Salt and Vinegar and watch your mouth turn into a circus.

Sour Cream & Onion

Pop these delectable and savory crisps into your mouth and crunch away! Smooth sour cream flavor and a delicious onion taste make for finger lickin' goodness.

Cheese & Onion

Everybody gets a lil' cheesy sometimes, so it's good to have a snack handy when the mood hits. Get your cheese on, and dig into a can of Cheese & Onion.

Hot & Spicy

This is snacking on the edge! If you like a snack that adds spice to your life and treats your taste buds to irresistible peppery flavor, dive into a can of Pringles Hot & Spicy crisps!

Page 23

OPERATIONS MANAGEMENT: 2008

Safeguard, launched in 1995 by Procter & Gamble has set new standards for defining "health & hygiene" in Pakistan. It is an anti-bacterial soap that provides germ protection for twice as long as ordinary soaps making it the doctors' number 1 recommended choice throughout the world. In addition to germ protection, it also caters to various other needs such as beauty care and protection against sweat odor.

Vicks is a well-established and leading brand for cough and cold Relief across the world. Globally, there are a broad range of products under the Vicks umbrella, ranging from Multi-symptom relief medicine (Nyquil and Dayquil) to the world famous Vicks Vaporub to other cough and cold relief syrups (Formula 44), tablets (Action 500), and drops (Vicks Throat Drops). In Pakistan Vicks Vaporub is the leading external medicine brand for cough and cold relief while Vicks Throat Drops are fast gaining acceptance as an instant relief for throat irritation. In the years to come, the Vicks team in Pakistan will introduce more and more of its successful products to the consumers of the country.

Page 24

OPERATIONS MANAGEMENT: 2008

Herbal Essences' shampoo formula has been specifically developed to deliver a richer, more sensuous lather using ingredients known as ‘lather boosters’ which stop each bubble from bursting too soon. The result is longer lasting and ultimately more fabulous lather which cleanses hair softly feeling wonderful to the touch. Product Type

Attribute

For Normal Hair 2in1 Herbal Essences moisture balancing 2 in 1 shampoo and conditioner blends lavender, jasmine and aloe with plant derived ingredients to calm and refresh hair and provide balanced conditioning and detangling with no build up.

For Dry/Damaged Hair 2in1 Herbal Essences replenishing 2 in 1 shampoo and conditioner blends Peony, Hibiscus and Vitamin E with plant derived ingredients to gently clean and moisturize, replenish and protect dry or damaged hair with optimal conditioners.

Page 25

OPERATIONS MANAGEMENT: 2008

For Normal to Oily Hair Reduce the build-up on your hair with the conditioning of Herbal Essences Clarifying/Residue Removal Shampoo. Made with Jasmine and Orange Flower, it rinses and cleans away, leaving no residue to weigh hair down.

Global Gillette, formerly The Gillette Company, likes to be on the cutting edge. The world's #1 maker of shaving supplies, the firm is best known for its razors and blades (Sensor, Trac II, and the premium-priced Mach3, M3Power, and Fusion), but it's also a leading battery (Duracell) maker. Gillette also makes Braun electric shavers. In October 2005 The Procter & Gamble Company (P&G) bought 100% of Gillette for about $57 billion in stock. Its Braun- and Oral-B-branded oral care products are now part of P&G's brand portfolio. It sold its Right Guard, Soft & Dri, and Dry Idea brands to Henkel's Dial for some $420 million.

Page 26

OPERATIONS MANAGEMENT: 2008

Page 27

OPERATIONS MANAGEMENT: 2008

Supply chain management has strategic implications because the supply system can be used to achieve important competitive priorities. It also involves the coordination of key functions in the logistics. Since, the organization is trading concern specifically in Pakistan. Sale is the key operation for the company that the company is growing on the total sale. It doesn’t mean that other operations are not important. But the starting point for the company is the sale of the product. It was the great opportunity for me to see the overall process of sale, in the sale operation, the prominent operations are:

 Order of the products  Supply of the product  Display

Page 28

OPERATIONS MANAGEMENT: 2008

One person is responsible for one task. TSO (Territory Sales Officers) take the order from the retailer & wholesalers and that order is recorded on the Pam computer. At the end of the market, they return back to the office and all the orders are transferred to a format. There is a computer section, which is having a specified format for the order that is developed in Oracle. All the orders are recorded automatically when the Palm computer is connected with the PC in office. When format are filled, the different vouchers are developed and bill list is generated. Now the supplier will supply the ordered product in the next day. After the supply of the product, the recovery of the payments is received from the customers. And that entire amount is given to the account officer in the office. The other important section is the display of the product in the shops. That is also most important to attract the customers. The advertisement cost becomes reduced in this manner, because after that the company will not spend on so much expensive advertisement like TV commercials.

Page 29

OPERATIONS MANAGEMENT: 2008

Page 30

OPERATIONS MANAGEMENT: 2008

As the acknowledged leader in Fast moving consumer goods, P&G is continuing to set industry-leading standards for total quality management. TQM is not any technique. It is basically a philosophy. It revolves around one thing “Customer Satisfaction”. How this customer satisfaction will achieve? It will achieve through: 1.

Employee involvement.

2.

Continuous improvement.

EMPLOYEE INVOLVEMENT: For employee involvement P&G gives the training to its employees with the passage of time. “Human Resource Department” arranges the training for their employees.

CONTINUOUS IMPROVEMENT: Continuous improvement will be achieved though: 1. Understanding customers’ needs and expectations. 2. Exceeding their promises and commitments. 3. Defining new industry service levels. This will be supported by continuing their investment in people, technology and infrastructure within the region. This will be maintained by the systems and procedures that are in place throughout our organization to optimize quality, reliability and consistency in their activities. P&G’s reputation depends on all of them working as a team to satisfy and retain the single most important person in their business.

OPERATIONS:

Page 31

OPERATIONS MANAGEMENT: 2008

Effective July 1, 2007, the company's operations are categorized into 3 "Global Business Units" with each Global Business Unit divided into "Business Segments," according to the company's June 2007 earnings release.

 Beauty  Beauty segment  Grooming segment  Household Care  Baby Care and Family Care segment  Fabric Care and Home Care segment  Health & Well-Being  Health Care  Snacks, Coffee and Pet Care

MANAGEMENT AND STAFF: Current members of the board of directors of Procter & Gamble are: Norman Augustine, Bruce Byrnes, Scott D. Cook, Joseph Gorman, A.G. Lafley, Charles R. Lee, Lynn M. Martin, W. James McNerney, Jr., Johnathan Rodgers, John F. Smith, Jr., Ralph Snyderman, Richard Dearlove, Margaret Whitman, and Brian Bowns. Norman Augustine will be retiring from the Board following the Company's October 2007 meeting. In 2007, the P&G's Canadian division was named one of Canada's Top 100 Employers, as published in Maclean's magazine, the only consumer products company to receive this honor.

Page 32

OPERATIONS MANAGEMENT: 2008

Page 33

OPERATIONS MANAGEMENT: 2008

“A forecast is the prediction of future events used for the planning purposes”. Generally customers make the indication about their future requirement some time ago. So it is relatively easy for the firm to manage that sort of demand and corresponding production. Also all the forecasting and demand handling is done by Head Quarter itself. A 6 month sales forecast maintains by the P&G.

FORECASTING TECHNIQUES: There the three forecasting techniques are available for the purpose of the forecasting of the demand, which are as under. 1.

Judgmental Method.

2.

Causal Method.

3.

Time Series Method.

The usage of these techniques depends upon the availability of the data about the past. Casual method use historical data on independent variables. Time series analysis relies heavily on historical demand data to project the future size of demand and recognizes seasonal trend and patterns. A key factor in choosing the forecasting method is the time horizon.

P&G is currently following the: 1.

Causal Method.

2.

Time Series Method.

Blow RoomPage 34 Card

Drawing

OPERATIONS MANAGEMENT: 2008

Page 35

OPERATIONS MANAGEMENT: 2008

 Procter & Gamble Latin America  Procter & Gamble Germany  Procter & Gamble India  Procter & Gamble Japan  Procter & Gamble France  Procter & Gamble Europe  Procter & Gamble UK

Procter & Gamble India is one of the country's leading advertisers, with a small portfolio of products led by India's best-selling healthcare brand, Vicks. For various historical reasons, the group operates through two separate subsidiaries, one of which is part-publicly owned.

FACTS ABOUT P&G PAKISTAN: • Procter & Gamble started its operations in Pakistan in 1991. • P&G Pakistan is headquartered in Karachi. • P&G Pakistan has reinvested over $100 million in Pakistan within the last 12 years. • P&G Pakistan has invested 63 million dollars over the last 5 years in terms of capital, marketing and training.

Page 36

OPERATIONS MANAGEMENT: 2008

• P&G Pakistan has contributed close to 7 billion rupees to the Pakistani government's revenues over the last 5 years in the form of sales tax, customs and excise duties. • P&G Pakistan creates more than 4,000 jobs in Pakistan. 99% of the jobs that P&G Pakistan creates in Pakistan are held by Pakistanis. • P&G Pakistan owns a sprawling 7-acre land manufacturing facility at Hub, Balochistan, which manufactures Safeguard and Camay soaps. A recent 5 million dollar investment has tripled the plant's capacity. • P&G Pakistan runs several social marketing programs in the field of education and health. These programs benefit more than 3 million people annually.

Page 37

OPERATIONS MANAGEMENT: 2008

Page 38

OPERATIONS MANAGEMENT: 2008

As already told that P&G has a distribution setup in Pakistan named as International Brands Ltd. IBL manages the inventory and sales of P&G products in Pakistan. In order to meet the high levels of distribution, IBL is & continuing to reduce operating costs, increase our supply chain efficiency, reduce inventory and shorten cycle times. If a brand supplied by a distributor is unavailable, consumers may switch to a competitor brand, abandon expensively generated brand loyalty. The levels of inventory maintained at IBL Multan are: Maximum Level of Inventory

Rs. 40 million

Minimum Level of Inventory

Rs. 20 million

Buffer Stock

Rs. 0.5 million

Page 39

OPERATIONS MANAGEMENT: 2008

RECOMMENDATIONS: • Illegal manufacturing is indulging in adulteration of following products o Pantene o Head & Shoulders o Pert Plus o Ariel To survive from this type of adulteration P&G should adopt effective strategy to safeguard against such activities.

• • • •

o More awareness o Product identification measures like Company Seal etc. They are market leader in 6 out of 12 products. They should take effective measure to enhance their market leadership Market share of Multan is only 9%; however Multan still has a lot of unexplored potential. Sales promotion measures should be adopted to enhance its market share Camay-Dog product should be re-launched by adding more attributes. Camay is a market leader product worldwide but in P&G Pakistan it is a dog product. P&G should focus on sales promotion rather than advertising in sub urban and rural areas of Multan and Southern Punjab.

Page 40

OPERATIONS MANAGEMENT: 2008

BIBLIOGRAPHY

www.pg.com www.pg.com.pk www.ansreview.org www.google.com www.yahoo.com Operations Management:

Page 41

LEE. KRAJEWSKI & LARRY P. RITZMAN