P&G’s Supply Chain Is Disaster Ready

Proctor & Gamble augmented a disaster-decision-making control system called a “decision-making clearinghouse” with technology from Kinaxis. It’s intended to proactively centralize responses to supply chain disruptions.

Kinaxis, a Canadian tech provider, provides P&G with a cloud-based software called Rapid Response. The software maintains a digital map of P&G’s supply chain and bill of materials for every product.

Rapid Response alerts planners at P&G to an anomaly or exception in the normal course of business by analyzing data for patterns and triggers. The data come from internal sources such as P&G’s ERP system, and external data like the National Weather Service forecast. Planners then run scenarios to find the most cost-effective solution to avoid supply chain disruptions.

This post is based on the Supply Chain Dive article, How P&G created a ‘ready for anything’ supply chain, by Emma Cosgrove, June 3, 2019. Image source: Shutterstock / Dmitry Kalinovsky

Discussion Questions:

1. What is P&G’s risk management strategy for supply chain resiliency?

Guidance: P&G’s risk management strategy is proactive, centralized, and cloud-based.  It is proactive in that it allows P&G to make supply chain adjustment decisions when disruptions are on their way, not after they happen.  It is centralized so that a central authority can decide or prioritize disruption responses with the entire business in mind.  It is cloud-based to allow easy access to the company’s supply chain and bill of materials for every product.

2. Identify elements of success for P&G’s Rapid Response in managing the company’s supply chain risks.

Guidance: The digital map of P&G’s supply chain helps identify the company’s suppliers and provides supply chain visibility by alerting P&G to anomalies (or “exceptions”). That provides P&G with event-response capability for detecting unplanned events, simulating potential solutions, and making recovery decisions quickly, decisively, and cost-effectively.