Procter & Gamble Value Chain Analysis

Procter & Gamble is an American multinational consumer products company and it began to using information technology in the late 1980s to support a conventional make-sell business strategy. The value chain analysis is used to assess the business competitive strategy by identifying primary and support activities to create value to its customer and analyzing these activities to get value from its supplier. The discussions about the value chain of Procter & Gamble (P&G) are in the following.

The primary activities include the inbound logistics, operations and outbound logistics, marketing and after-sale service. Firstly, P&G 's raw materials are procured from all over the world because P&G focus on improving supply chain efficiency and costs for

P&G has great network link to their major supplier and customers. Secondly, P&G provided variety of products range such as health and grooming, fabric and home care, babies and family care, beauty and personal care to retailers. According to Boateng (2011), the P&G use product lifecycle management software for new product development from 2000. This software can generate the knowledge components and flow components based on the bringing-a-product-to market phases. Thirdly, P&G uses point-of-sale data provided by retailers to generate orders and only deliver the products based on the customer sales. This not only saved the money in inventory cost for retailer but also lower the costs on item and reduce development time for company. For those highly automated retailer such as Wal-Mart, its orders are based on actual sales records and 40 percent of all orders are generated by computer-base. P&G also shares the data with its retail customers to improve the profits of its channel partners. Fourthly, P&G changed to customer management by assigning one P&G representative to sort sales to individual stores. In early 1990s, P&G developed 27 different types of promotions and retailer definitely responded to these price promotion. This resulted in huge orders so that

As a listed company, P&G has strong fundamental infrastructure such as legal, accounting and financial management. The accounting team not only deals with the daily accounts from supplier to customer but also prepares the annual financial report to the public (shareholders, investors and so on). In order to reduce the risk, it has good financial planning for its operation. For example, it introduced the agent-based modeling which saved $300 million per year with less than $1 million investment on this system. This model program the behavior of agents such as supplier, customer, distribution, inventory based on the rules and it allows the simulations in the computers. The results from simulation can be used to analyze the effect of logistics procedures such as inventory levels, transportation cost and stock-outs in the store (UKEssays, 2014). This model also provides more flexible in manufacturing. The manufacturing does can produce every product in the fresh date so that it reduces the inventory in the distribution centre and fewer stock-outs in the stores. The important thing is that makes the customers more happier. On the other hand, the purpose of human resource department is to recruit and select the right person in the right position. Therefore, the HR department has to take the systematic procedures such as identifying the job