Procter & Gamble (P&G) is the world’s leading manufacturer of consumer products. P&G, founded in 1837 by British American William Procter and Irish American James Gamble, is headquartered in Cincinnati in the United States, and the company has now been built into a $67 billion conglomerate. Within its portfolio, P&G has 21 billion-dollar brands (e.g., Bounty, Crest, Tide), operates 130 plants staffed by 95,000 people, has some 70,000 suppliers around the world, and sells its products in more than 180 countries. By all accounts, P&G has been a giant multinational corporation for more than a century and will continue to be highly influential in consumer products for years to come.
At the same time, very few industries are as competitive as consumer packaged goods. Just think about the options you now have compared with five years ago. In most cases, we as customers have many more options in every consumer packaged-goods category than we did then. The global marketplace has a lot to do with this competitive environment.
Fragmentation and specialization in consumer products from more companies have resulted in more products and more places from which to buy. The infrastructure for developing products, entering markets, and maintaining customer relationships is more robust than ever, resulting in small- and medium-sized enterprises (SMEs) being competitive with companies like P&G (which they could not have competed with just a few years ago).
This market competitiveness has led companies like P&G to constantly assess the efficiencies and effectiveness of their production, operations, and global supply chains. For a long-standing industry titan like P&G, this increasingly competitive global environment—see the figures in Chapter 1 that show the drastically increased international trade in the last 20 years—has led to a newfound sense of urgency for P&G to get closer to both its customers and suppliers to maximize diminishing margins while selling products at a competitive price. This is not an easy task, because margins in the consumer packaged goods market are already very tight. That led P&G to evaluate and ultimately remake their global supply chains.
P&G’s goal is to replenish at least 80 percent of the retail orders the company receives in less than a day. To be able to do this, P&G redesigned its distribution network. The company has improved transparency throughout the end-toend supply chain, developed even stronger partnerships with its suppliers, and focused on maximizing synergy throughout the production cycle. Given this focus on synergy and supplier partnerships, P&G now develops global strategic supply chain plans jointly with (at least) its core suppliers. This is not to say that all 70,000 suppliers working with P&G are involved, but the so-called “strategic suppliers” are very much entrenched in working together with P&G.
P&G’s 70,000 suppliers include chemical companies (e.g., Dow Chemicals, DuPont) that supply raw materials for cleaning supplies; packaging companies (e.g., Diamond Packaging, Van Genechten Packaging) that supply packaging materials for the company’s products; and indirect providers (e.g., Jones Lang Lasalle) that deliver services such as warehouse maintenance and janitorial services. With the number and breadth of suppliers, P&G continuously focuses on maintaining a strong supplier relations program. Guiding its supplier relations program, P&G has a set of core principles:
(1) Best Total Value, (2) Honest, Ethical, and Fair Dealings, (3) Externally Linked Supply Solutions, (4) Competition and Collaboration, and (5) Supplier Incumbency.
P&G appears to be in the forefront of continually evaluating and, when needed, remaking its global supply chains to maintain the titan position in the consumer packaged goods industry. Despite this success at being able to remake itself so far, one can wonder if P&G, at some point, will run into difficulties competing with companies like Alibaba and Amazon. Or, will Alibaba and Amazon simply continue to sell P&G’s products (instead of starting to market their own).
Alternatively, will companies like P&G be able to use their sophisticated global supply chains to expand into new territories similar to what Alibaba and Amazon did not too long ago?

Questions
1. P&G is the world’s leading manufacturer of consumer products, but most customers do not really know the P&G brand. Does that matter, or should P&G brand more of their products under the P&G brand (instead of Bounty, Crest, Tide, and so on)?
2. Considering P&G’s massive product portfolio and the company’s enormous size, what global supply chain efficiencies do you think P&G has that other companies cannot match given the size and scope of P&G?
3. Given P&G’s focus on synergy and supplier partnerships, how many of P&G’s suppliers do you think should be labeled strategic, and how many should be considered just transactional relationships, and why?