improving the current solution and supporting the
company’s growth plans.
These global networks provide the backbone to
drive scalability and efficiency for the company and
are a primary reason why P&G is ranked as one
of the best-managed supply chains in the world.
It has won numerous best-practice awards, including
multiple consecutive top-five placements in AMR
Research’s list. Through the HPNs, planners are continually
trained to use planning tools and systems
to help meet business objectives regarding cost, cash,
and service management.
For a company with P&G’s product depth and
breadth, a one-size-fits-all inventory strategy is not
optimal. Capacity utilization of high-speed papermaking
operations, in which capital and logistics costs
demand high utilization and turnover for profitability,
differs dramatically from hair-care batch-making
operations in which many stock-keeping units (SKUs)
are made and distributed through a multiple-tier distribution
network. Different businesses require different
modeling methods and tools to determine the
correct inventory levels. In recognition of this need
for different inventory models, P&G has deployed a
framework (see Figure 2) that assigns the appropriate
inventory technology to any business based on its
operating characteristics and complexity. In the next
paragraph, we describe the framework and its applicable
terms.
The primary selection criterion is network complexity—whether
or not the planner is setting inventory
targets at several echelons in the supply chain.
As we will show, the majority of supply chains in
the Beauty & Grooming GBU are in this category.
These supply chains span multiple echelons and benefit
tremendously from multiechelon inventory optimization.
Depending on the workflow defined by
the planner, the technology employed is a thirdparty
software solution from Logility, Inc.—either
Voyager Inventory Strategy Optimization (VISO) or
Voyager Inventory Target Optimization (VITO). Alternatively,
many of the supply chains in the Household
Care GBU are planned at a single echelon.
A single-stage inventory tool has been customized