The potential benefits of CRP for production cost and inventory savings were quite large.
Savings in inventory or production were not automatic, but the shift to a more stable environment
enabled P&G to negotiate more attractive pricing with suppliers and to use internal production
capacity more efficiently. In some cases, the efficiency gains from value pricing, rationalized
product lines, CRP ordering, and dramatic improvements in process reliability resulted in sufficient
excess production capacity to eliminate entire production plants. During the 1990s, many P&G
plants were expected to close as a result of improved operations due to the new policies and
processes. In 1993, P&G took an extraordinary charge of almost an entire year's profits to reflect the actual and expected costs of closing unneeded plants and reducing total employment levels for the
company (Exhibit 7).