Value Chain Analysis of Procter and Gamble
Value Chain Analysis of Procter and Gamble case study
Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best outsourced. It suggests that the activities of a business could be grouped under two headings: primary activities and supporting activities.
1. Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly).
Sourcing and Procurement (sourcing, supply planning, materials procurement)
Relating this model to P&G’s case study, it could be implied that P&G’s raw materials are sourced and/or procured from all over the world, wherever it would be cost-effective. It is thus no surprise that for a number of years it had focused on ways to improve supply chain efficiency and costs. It now has a powerful industrial network linking electronically to major suppliers and customers. This is to the extent that it changed companies when efforts to reduce inventory levels only produced marginal improvements. This led to the introduction of agent-based modelling.
Operations (assembly, branch operations)
P&G’s operations had four business units: health and beauty, babies, snacks and beverages, and fabric and home care. It offered more than 300 products including major brands like Tide. It has been aggressively using product lifecycle management software since 2000 for new product development. The company uses MatrixOne software for mechanising and automating the knowledge components, and flow components, within the bringing-a-product-to market phases. In addition, the company is planning to expand its use of agent-based modelling to actually run important aspects of its operations so that end-to-end replenishment cycle for products could be shortened drastically.
Outbound Logistics
Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best outsourced. It suggests that the activities of a business could be grouped under two headings: primary activities and supporting activities.
1. Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly).
Sourcing and Procurement (sourcing, supply planning, materials procurement)
Relating this model to P&G’s case study, it could be implied that P&G’s raw materials are sourced and/or procured from all over the world, wherever it would be cost-effective. It is thus no surprise that for a number of years it had focused on ways to improve supply chain efficiency and costs. It now has a powerful industrial network linking electronically to major suppliers and customers. This is to the extent that it changed companies when efforts to reduce inventory levels only produced marginal improvements. This led to the introduction of agent-based modelling.
Operations (assembly, branch operations)
P&G’s operations had four business units: health and beauty, babies, snacks and beverages, and fabric and home care. It offered more than 300 products including major brands like Tide. It has been aggressively using product lifecycle management software since 2000 for new product development. The company uses MatrixOne software for mechanising and automating the knowledge components, and flow components, within the bringing-a-product-to market phases. In addition, the company is planning to expand its use of agent-based modelling to actually run important aspects of its operations so that end-to-end replenishment cycle for products could be shortened drastically.
Outbound Logistics