Alignment of Supply Chain Management with the Needs and the Environment of the Business

Effective supply chain management is integral in any given organization. Aligning the competitive supply chain management requirements with the needs and the environment of the business is critical and allows businesses to thrive in competitive marketplaces. However, many organizations fail to develop an efficient supply chain that blends well with the organizational characteristics and businesses. Alignment of business strategy with the overall business strategy has become the centre of many researchers and scholars (Handfield et al, 2015).  An effective business strategy is a powerful driver towards the success of the organization. Supply chain management is the management of business intertwined operations that organizations engage in during the provision of the ultimate products and services to the consumers (Beske, Land & Seuring, 2014). To ensure a smooth running of the businesses, organizations must ensure that the supply chain operations align with the competitive requirement of the businesses. This study will mainly focus on the alignment of supply chain management of Proctor and Gamble Company (where I worked as an intern during my studies) and provide a recommendation of the best strategy for the company.

Proctor and Gamble Company

Proctor and Gamble is a multinational company and owns more than thirteen brands which enable it to make over a billion annual incomes. The company’s main focus is to produce products that satisfy’s their customers at an affordable and competitive price. To compete successfully in the current competitive market, the company must have excellent supply chain management to enable it to reach its goals on cost-effective bases.  The company’s brand is well known and includes pampers, nappies, shampoos and potato clips. The diversity of the clients and consumers make the company consider an effective supply chain management to enable it to meet their needs and demands.

Due to the extent of growth, globalization and the rate at which the company is expanding into a multinational level, the supply chain management of the company has become a crucial tool to enable it to sail through the rough tides and waves of competition in the market and industry. The Technological changes and advancement have brought the cost factor that information flows very fast and at a very low cost thus allowing the operations of the supply chain management to integrate and relate so well among the team players.  

Proctor and Gamble utilize a supply chain management basis to pan out solid and long-lasting competitive advantage in the market.  The company SCM affects both the purchaser items and retail commercial enterprises. The SCM ensures immediate conveyance of goods to customers and retailer shops when needed.

The company’s strategies

One of the most efficient and important strategies of the company’s SCM is the availability of its product. Most of the products that the company produces are accessible by all walks of life worldwide and are offered at convenience stores and supermarkets. The availability of its products gives it a competitive advantage over its competitors who are lagging behind in the delivery of goods to the consumers.  They are able to obtain the goods easily whenever they need them to make their lives better.  The availability of the products makes the product brand strong and enhances the customer’s loyalty to a greater extent.

Just like other players in the industry, Proctor and Gamble heavily invest in the research and development of the. The company devoted over two billion dollars on annual basis and has over 10,000 employees in research and development arena. Through this, the company has been able to successfully improve the brand over the time. However, the company fails to develop other brands thus facing a delay in terms of development and growth.  Researchers state that the companies need to view the world as an innovation lab and thus they should only consider developing new brands and products each new dawn. However, the company mainly focuses o value-added supply chain networks as the process is more customer oriented compared to the traditional supply chain management (Serra & Kunc, 2015).  The company registers a three-fold success rate than it was before.  

To fully take advantage of the benefit of the internet, Proctor and Gamble launched its own website. The website integrates customers, suppliers, distributors, and other stakeholders and allows them to share their opinions and ideas with the company (Michalski Montes-Botella  & Narasimhan, 2018). In his light, the company is able to collect valuable feedback and welcome diverse innovation from the groups. Therefore the company is able to keep track of the customer’s needs and wants and respond effectively.

Another strategy applied by the company as an effective tool for development is change management. The company observes the latest trend and technology and responds to them to meet customer’s demands and wants. The change allows organizations to take exploit opportunities to meet the customer’s expectation on a real-time basis. As competition is increasing very fast, businesses need to ensure that they have what it takes for them to remain up and running in the long run. The company needs to be able to react fast to the changes in the market. Fortunately, Proctor and Gamble acknowledge the power vision and growth.  Companies use change management as one method to allow them to respond to the changes in the market in a healthy and quick manner. 

As the world is rapidly changing into a global village, there is a need for companies to utilize the latest technologies in order to reach their customers with ease and convenience.  The connection is integral to allow the companies to maintain the competitive edge and maintain the loyalty to the consumers and customers.  In the social world, each individual is socializing and looking for platforms which allow them to connect easily. Trough the introduction of the platform of ‘connect and grow’, proctor and gamble have been able to penetrate deep and reach out to the world. Also, the platform allows the company to understand more about the surrounding of their customers and the events taking place in the global village of their customers.

Supply chain management strategies

Successful supply chain management encourages growth and welcomes innovation in any given organization.  Proctor and Gamble remain the main leader in supply chain management due to certain supply chain strategies it applies to the system and to their customers.

For instance, one of the most successful strategy that the uses in the ‘living it’ program in Brazil.  The company decides that in order to understand the cultural diversity of Brazilian people, they need to stay in the community and be part of their lives. The program enabled the company to understand their customers, establishes health business relationships with consumers as well as work on new products for them (Fredendall, Letmathe & Uebe-Emden, 2016).  Also, they were able to form healthy distributions as well as find better ways to communicate with their customers.  

Proctor and Gamble integrate their supply chain with, suppliers, customers, distributors and retailers. The integration ensures thorough tracking of goods throughout the system to increase cooperation and visibility of the same. An effective business supply chain management can positively impact the revenues and margins of any given business. Many businesses fail to develop a significant supply chain to help them deliver better efficiencies at lower costs and competitive prices.  Proctor and Gamble keep raising the bar high and demonstrate that there is more that can be done to improve the supply chain management of the organization (Monczka et al 2015).  They keep their supply chain competitive through adopting new technology to optimize the supply chain at an affordable price. Also through the use of demand- sensing and demand replenishing models allow the company to keep track of each of their product. The process enables them to produce the right size goods to avoid related costs such as storing damages of the products.  Also, the company is able to avoid producing excess inventory thus cutting the production costs such as labour and other variable costs.

Procter & Gamble finest supply chain management involves making their products available for re-development and consolidation. The main aim is to widen the customer base by reducing the number of products per each product type. The process is subject to the close investigation and analysis by experts and scientist. By reducing the number of products, the company will be able to focus more on the quality of the product as opposed to the quantity of the same. The products will also focus on the innovations and integration of the latest trends. The experience will enhance customer’s expectations and wants (McCormack & Johnson,  2016). It will also help the customers to prepare their products for the future competitive market.

The other strategy employed by Proctor and Gamble is to reduce the capital spending to a certain percentage of sales. The capital reduction will mainly focus on the supply chain management of the company. Successful reduction of the supply chain costs will extend to the related costs. In this light, the consumers were able to benefit from competitive prices.  As a result, the company will be able to strengthen its customers’ loyalty and brand. More and more customers will be satisfied, and the company will be able to increase its revenue and contributions per product.

Proctor and Gamble also concentrate on building strong core businesses and leading brands into strong market leaders. As of the moment, the company has four main core businesses which include feminine care, fabric care, hair care and baby care. The company devotes a lot of attention and resources to help the brands to grow and survive in the very competitive market.  As a result, the core businesses attract more than 50% f sales and a significant portion of profits. The core businesses will enable the company build healthy relationship wilt suppliers of the respective cores.  Monitoring the businesses will be easy as the company will be able to identify the performance of every unit and take necessary measures.

Recommendations on the best strategies

1. In the competitive market environment, Procter & Gamble needs to keep track of the fast moving products to improve them further so that they can fetch more revenue. In this light, the strategy of consolidation should be taken seriously as it will allow the company to make slightly different products for the satisfaction of their customers.

2. Producing of cultural informed products will be a very helpful and successful step for the company. The society and the communities presented will feel valued and thus change their perception of the brand and the products. In this regard, the company should consider moving to other parts of the globe to socialize and interact with other cultures.

3. Given that the market and the business environment keeps changing so rapidly, the company should consider change management as one of an integral tool for development.  Successful brands should feature the current strategies and trends in the market. Such products will have positive insights to customers, shareholders and the public.

4. Finally, Procter & Gamble should employ the strategy of quality assurance of products in order to build the brand image as well as customers acceptance in the market.

Conclusion

Supply chain management is the main driver for success in for business in the current competitive markets. Further supply chain management is becoming so complex dynamic as day’s progress. Proctor and Gamble is a multinational company that operates across the globe. The company contributes towards the creation of new employment in both developed and developing countries. They have a diver product base which enables them to secure a large market share as compared to other competitors in the same industry. The company is leading in supply chain management, and a large part of its success is associated to elaborate supply chain management. Also, the alignment of business and supply chain strategies enables the company to foster development and growth. The business strategies guide the company on the overall direction to follow, while supply chain management allows them to achieve the business strategies and goals.

References

Beske, P., Land, A., & Seuring, S. (2014). Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, 131-143.

Fredendall, L. D., Letmathe, P., & Uebe-Emden, N. (2016). Supply chain management practices and intellectual property protection in China: Perceptions of Mittelstand managers. International Journal of Operations & Production Management, 36(2), 135-163.

Handfield, R. B., Cousins, P. D., Lawson, B., & Petersen, K. J. (2015). How can supply management really improve performance? A knowledge‐based model of alignment capabilities. Journal of Supply Chain Management, 51(3), 3-17.

McCormack, K. P., & Johnson, W. C. (2016). Supply chain networks and business process orientation: advanced strategies and best practices. CRC Press.

Michalski, M., Montes-Botella, J. L., & Narasimhan, R. (2018). The impact of asymmetry on performance in different collaboration and integration environments in supply chain management. Supply Chain Management: An International Journal, 23(1), 33-49.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.

Serra, C. E. M., & Kunc, M. (2015). Benefits realisation management and its influence on project success and on the execution of business strategies. International Journal of Project Management, 33(1), 53-66.