After Procter & Gamble bought Gillette, it faced the daunting task of managing the largest supply chain integration in consumer products history. Here's how P&G did it.

Picture two separate supply chains stretching around the world to 180 countries. Now picture weaving them into a single supply chain while taking out each and every redundant thread. That's exactly what Procter & Gamble (P&G) had to do when it bought the Gillette Company for $57 billion.

When P&G of Cincinnati, Ohio, bought Boston, Massachusetts-based Gillette in October of 2005, the combination made it the world's largest consumer goods company. By that time, P&Gwhich started out as a soap manufacturer 150 years agohad become a global provider of personal care, household cleaning, and laundry products as well as such varied items as disposable diapers and prescription drugs. The acquisition added such well-known brands as Gillette razors, Duracell batteries, Braun personal care products, and Oral-B toothbrushes to P&G's portfolio.

Merging the two supply chains was a high priority because it would significantly contribute to P&G's bottom line. The amalgamation, company executives believed, could deliver $1 billion in cost savings and another $750 million in incremental salesif it were done right.

But the integration was fraught with difficulties. "The biggest challenge was the sheer complexity of the change," says Daniel Myers, the P&G veteran who oversaw the supply chain merger. "The Gillette acquisition was the largest in P&G company history and the largest in the history of the consumer products industry."

Despite that complexity, by June 2007 P&G had completed 97 percent of the supply chain integration. Any global consumer goods company like P&G must address the following questions regarding thesupply chain:

Questions:

1. Explain how P&G efficient and effective supply chains can improve customer fulfillment and cash flows?

Winter Term 2022 Instructor: Jaison Mathews

Discuss the development and shaping of supply chains in merged Gillette-P&G and understand their contributions to their financial viability?

Understand the contributions of integrated supply chain management to organizational efficiency and effectiveness for competing successfully in the global market place?

Explain the benefits that were achieved from implementing supply chain best practices by P&G?

Explain the major supply chain challenges and issues faced by P&G currently and in the future?