Procter & Gamble Embraces Continuous Planning and Execution

The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer health, and personal care and hygiene products; these products are organized into several segments including Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine, & Family Care. Before the sale of Pringles to Kellogg's, its product portfolio also included foods, snacks, and beverages.

Procter & Gamble's mission statement is “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come.”

The Procter & Gamble Company today expanded its sustainability goals to continue creating value with consumer-preferred brands and products while conserving resources, protecting the environment, and improving social conditions for those who need it most.
P&G is guided by 12 established Environmental Sustainability Goals toward its vision of 100% renewable energy use, 100% renewable or recycled materials for all products and packaging, and zero consumer and manufacturing waste going to landfills. Since establishing its goals in 2010, P&G has made considerable progress. There now are 70 zero-waste manufacturing sites; energy consumption, water use, C02 emissions, and truck transportation are all down significantly; use of renewable energy and the number of virgin-materials certifications are up substantially. P&G also has expanded its social sustainability work, touching and improving the lives of more than 50 million people each year through disaster relief and programs such as Children’s Safe Drinking Water and the Pampers UNICEF partnership.



Nowadays, P&G has operated on the global stage for decades and has seen its share of challenges, failures and successes along the way. The company successfully operates in over 180 countries. Also, P&G has created a groundbreaking business intelligent system called Business Sphere which allows it to respond rapidly to changes in the marketplace and uncover new opportunities. It is a visually immersive data environment that transforms decision-making at P&G by harnessing real-time business information from around the globe.

Moreover, comparing the results to its competitors, P&G reported Total Revenue decrease in the fourth quarter of 2015 by -16.1%, despite revenue increase by most of its competitors of 0.17 %, recorded in the same quarter. With net margin of 19.08% P&G achieved higher profitability than its competitors.

The Procter & Gamble Company’s management strategy follows goals for optimization in efficiency and effectiveness in satisfying various needs of the business in consumer goods markets worldwide. For example, based on higher productivity, Procter & Gamble’s managers can implement higher production capacity directives. These conditions contribute to the company’s ability to stabilize its global business.

Procter & Gamble’s managers are concerned about product specifications and development within organizational capabilities, while supporting goals for innovation. In applying this approach, the company’s managers focus on cost minimization without sacrificing product quality. In addition, quality management’s objective at P&G is to implement quality standards based on the expectations of target customers or consumers.

Also, Procter & Gamble’s objective is to develop and implement short-term and intermediate operational schedules for optimum utilization of resources to support business needs. For example, Procter & Gamble’s corporate office employees adhere to their fixed schedules for data processing and analysis. On the other hand, operations managers apply rotating schedules for manufacturing processes. Some of these rotating schedules are variable to enable Procter & Gamble to correspondingly vary its productivity as a way of addressing changes in market demand for consumer goods.

1. The external environment is continually changing and dynamic environments are more the norm than the exception. Managers should effectively plan in such environment.
a. Do you believe in that? How can managers plan effectively in such environment? ?
b. How turbulent is Proctor & Gamble’s environment and how well do you believe that they adapt to it? Support your answer by example from the case .

Merrimac Manufacturing has always purchased a certain component part from a supplier on the East Coast for $40 per part. The supplier is reliable and has maintained the same price structure for years. Recent improvements in operations and reduced product demand have cleared up some capacity in Merrimac’s own plant for producing component parts. The particular part in question can be produced internally by Merrimac at $25 per part, with an annual fixed investment of $30,000.

a) Over what range (quantity) of product would each of the two options be the preferred one?

b) As an alternative, a new supplier located nearby is offering to produce parts on the following cost schedule. For the first 100 parts, the cost is $52 per part. For each part in excess of 100, the cost per unit drops to $35 per part. Considering just the two suppliers, over what range (quantity) of product would each supplier be the preferred one?

Prototyping is often used to test products and product ideas. Define prototyping and explain the benefits obtained from prototyping. What limits the number of iterations associated with a prototyping test? How would you use a prototype model in an operation for which you were responsible?

Describe how Sony can use the five product features that affect adoption in order to speed up the diffusion of its new TV model. What feature could be applied in a strategic plan to reach a new target market?

For decentralized decision making to be successful, it should be predicated on a belief that decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions. Do you agree or disagree? Why? Cite an example that helps defend your position.

What is the main difference in approach between Business Process Reengineering and TQM/Lean?

Discuss how teen subcultures are diverse. Discuss the impact of teen subcultures on valuing diversity. In what ways do teen subcultures bond diverse people together (athletes of different races, for example) and help them to understand one another better? In what ways do teen subcultures separate people into “cliques” or foster stereotyping (“us” vs. “them”)?

Based on this exercise, what are the challenges for organizations that are seriously attempting to value diversity? What are the benefits to these organizations? How do organizations train people about cultural (and subcultural) differences without falling into stereotyping?

Sunflower Incorporated Case study

S unflower Incorporated is a large distribution company with over 5,000 employees and gross sales of over $700 million (1991). The company purchases and distributes salty snack foods and liquor to independent retail stores throughout the United States and Canada. Salty snack foods include corn chips, potato chips, cheese curls, tortilla chips, and peanuts. The United States and Canada are divided into 22 regions, each with its own cen-tral warehouse, salespeople, finance depart-ment, and purchasing department. The company distributes national as well as local brands and packages some items under private labels. The head office encourages each region to be autonomous because of local tastes and prac-tices. The northeast United States, for example, consumes a greater percentage of Canadian whisky and American bourbon, while the West consumes more light liquors, such as vodka, gin, and rum. Snack foods in the Southwest are often seasoned to reflect Mexican tastes. Early in 1989, Sunflower began using a financial reporting system that compared sales, costs, and profits across regions. Management was surprised to learn that prof-its varied widely. By 1990, the differences were so great that management decided some standardization was necessary. They believed that highly profitable regions were sometimes using lower-quality items, even seconds, to boost profit margins. This practice could hurt Sunflower’s image. Other regions were facing intense price competition in order to hold mar-ket share. National distributors were pushing hard to increase their market share. Frito-Lay, Bordens, Nabisco, Procter & Gamble (Pringles), and Standard Brands (Planter’s peanuts) were pushing hard to increase market share by cut-ting prices and launching new products. As these problems accumulated, Mr. Steelman, president of Sunflower, decided to create a new position to monitor pricing and purchasing practices. Agnes Albanese was *Adapted from R. Daft, Organization Theory and Design decision (St. Paul: West, 1983), pp. 334–36. hired from the finance department of a com-peting organization. Her new title was director of pricing and purchasing, and she reported to the vice president of finance, Mr. Mobley. Steelman and Mobley gave Albanese great lati-tude in organizing her job and encouraged her to establish whatever rules and procedures were necessary. She was also encouraged to gather information from each region. Each region was notified of her appointment by an official memo sent to the regional managers. A copy of the memo was posted on each warehouse bulletin board. The announcement was also made in the company newspaper. After three weeks on the job, Albanese decided that pricing and purchasing decisions should be standardized across regions. As a first step, she wanted the financial executive in each region to notify her of any change in local prices of more than 3 percent. She also decided that all new contracts for local purchases of more than $5,000 should be cleared through her office. (Approximately 60 percent of items distributed in the regions was purchased in large quantities and supplied from the home office. The other 40 percent was purchased and distributed within the region.) Albanese believed that the only way to standardize operations was for each region to notify the home office in advance of any change in prices or purchases. Albanese discussed the proposed policy with Mobley. He agreed, so they submitted a formal proposal to the presi-dent and board of directors, who approved the plan. Sunflower was moving into the peak holi-day season, so Albanese wanted to implement the new procedures right away. She decided to send an e-mail to the financial and purchasing executives in each region notifying them of the new procedures. The change would be inserted in all policy and procedure manuals throughout Sunflower within four months. Albanese showed a draft of the e-mail to Mobley and invited his comments. Mobley said the Internet was an excellent idea but wondered if it was sufficient. The regions handle hundreds of items and were used to decentralized deci-sion making. Mobley suggested that Albanes ought to visit the regions and discuss purchasing and pricing policies with the executives. Albanese refused, saying that the trips would be expensive and time-consuming. She had so many things to do at headquarters that a trip was impossible. Mobley also suggested waiting to implement the procedures until after the annual company meeting in three months. Albanese said this would take too long because the procedures would not take effect until after the peak sales season. She believed the procedures were needed now. The e-mail went out the next day. During the next few days, replies came in from most of the regions. The executives were in agree-ment with the e-mail and said they would be happy to cooperate.
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Eight weeks later, Albanese had not received notices from any regions about local price or pur-chase changes. Other executives who had visited regional warehouses indicated to her that the regions were busy as usual. Regional executives seemed to be following usual procedures for that time of year.

Questions

1) CORPORATE & BUSINESS STRATEGY                                                                                       

Identify known or perceived strategies (corporate-level, business-level, competitive, functional).

2)  

SWOT                             

Conduct a SWOT analysis. Identify internal strengths and weaknesses and external threats and opportunities.                                                                                         

                              Strengths                                    Weaknesses                                                  

                              Opportunities                              Threats        

3.)

STRUCTURE & CONTROL SYSTEMS                                                                                 

Analyze structure and control systems and determine the degree of fit between the company's strategy (strategies) and structure.

1. Evaluate the forecasting model using 3 month moving average, and 3 month moving weighted average, and exponential. The weights are .5 for the most recent demand, .25 for the other months. Alpha = .3. Use the weighted moving average for January Forecast.

2. Calculate MAD and MAPE for each and compare. Which method is a better forecast and why?

What is the difference between incremental innovation and radical innovation? Offer one example of a radical innovation. Explain why your specific example illustrates radical innovation.

Do you think that EAP and EWP programs are a good investment for a company? Why or why not?

The reservation office for Central Airlines has two agents answering incoming phone calls for flight reservations. A caller can be put on hold until one of the agents is available to take the call. If all three phone lines (both agent lines and the hold line) are busy, a potential customer gets a busy signal, in which case the call is lost. All calls occur randomly (i.e., according to a Poisson process) at a mean rate of 15 per hour. The length of a telephone conversation has an exponential distribution with a mean of 4 minutes.

(a)Construct the rate diagram for this queueing system.

(b) Find the steady-state probability that:

1. A caller will get to talk to an agent immediately.

2. The caller will be put on hold, and

3. The caller will get a busy signal.

As a store manager of an employee who has been accused of profiling a customer, what actions would you take for both the customer and the employee?

* need a new answer, this one is already answered on Chegg.