Distribution structure of proctor and gamble

2. Distribution Strategy
– Failing to aggressively challenge Lever in soaps and detergents.
– Project Golden Eye- The latest initiative in rationalising its sales and distribution
system.
– Objective- Slashing the no. of distributors to one-tenth of its size.
– Results- Saving the cost of extensive distribution cover.
– P&G has rewritten its focus areas: laundry (Ariel), sanitary napkin (Whisper),
and Vicks.

3. Distribution Structure

4. Infrastructure required by Distributors
Warehousing Facilities Logistics Services
Marketing
Infrastructure
Distribution
Extension
IT Infrastructure

5. Guidelines to be followed by
P&G Distributors
– Audit
– Legal Compliance
– Human Rights
– Child Labor
– Forced Labour, Human Trafficking, & Employment Eligibility
– Wages and Hours
– Health & Safety

6. C&F Agents
Clearing & Forwarding Agents
Activities normally undertaken by a C&F Agent:
• Receiving goods from the factory of the company
• Warehousing these goods
• Receiving dispatch orders
• Arranging dispatch of goods by engaging transportation for the goods
• Maintaining records of dispatch of goods and stock available at the warehouse
C&F agent for P&G in Delhi-NCR: Bakshi Associates Pvt. Ltd.

7. Distributors and Retailers
Distributors
• After C&F agents transport the goods to distributors next in the supply chain
• Typically middlemen between the factory and the retailers
Distributor for P&G in Delhi-NCR region: Amazon Distributors
Retailers
• Distributors supply the goods to the retailers which are typically the last link between
company and customers
• Large retailers get goods directly from company whereas small retailers from the distributor

8. Payment or credit terms given to
distributors by the company
– standard payment terms and Credit policy for all its Distributors , major change in 2013.
– Increased the time it takes to pay for supplies
– P&G’s payment terms policy is net 75 globally, where legally allowed, for all new Suppliers/ External
Business Partners (EBPs) starting March 1, 2013.
– Implemented in phases to existing EBPs: -
– July 2013 as the company entered into new or modify existing agreements with largest EBPs
(>$1MM in spend with P&G) –
– From April 2014 on a rolling basis to the rest of our EBPs

9. Payment or credit terms given by
distributors in the market
– A payment term depends on the monthly sales of the Retailer
– Can vary widely depending on the scale of operations of that particular retailer.
– Amazon Distributor in Delhi Region able to exercise monopoly and Dictate the terms of payments
as per its convenience.
– P&G usually has only 1 or 2 Distributors in the State – Shifting of Bargaining power for the Credit
terms in favour of the Distributors

10. Problem faced by P&G Distributors
Availability Management
In Complex Distribution
System
Presence of Various
Players
Varying Complex
Taxation
System
Fake Goods
Third Party Logistics
Provider

11. Points Of Conflict
OFFLINE
AND
ONLINE
CHANNEL
CONFLICT
• Concepts like with in hours delivery
• Fast metropolitan life
BIG
DISTRIBUTI
ON
PLAYERS
• Strong distribution network of competitors
• Retail brands like reliance fresh and big bazar

12. Logistics Network

13. IT Solutions at P&G
Material
Planning
Invoicing and
Payment
Reports
Electronic
Invoicing
Purchases
Solutions: EZ
Pricing
ENOVIA ARAVO
Coming Soon:
ARIBA

14. Work Process Description
– Platform gives visibility into current inventory levels and forecasted
consumption, so that stock replenishment can be managed proactively.
– Suppliers can automatically trigger Advanced Shipment Notification (ASN),
which contains information similar to a delivery note. Gives real time
information of when to expect delivery and actual quantity shipped.
– Once shipment arrives, a goods received notification is electronically triggered
in the system.
– This enables three-way match of the purchase order, goods receipt and invoice,
enabling timely payment of invoices.

15. Supplier Portal
– Suppliers have an access to online portal to check invoicing requirements and
check the status of outstanding invoices at anytime anywhere.
– Quick view of invoice
– Use of Bots (Bobby) to find missing invoices
– See payment reports
– Get access to all P&G vendor codes
– Reduces number of touchpoints for payment issue realization

16. Supply Chain Management
– Product Age at Retailer’s End- 15-60 days
– Number of Distributors- P&G only has one distributor in Delhi NCR region
– Distribution Strategy- Pull based strategy is followed by P&G and the company follows
up on demand generated for its products.
– Each distributor does a business of about 65-70 crores with an ROI in excess of 25%
– No End of the Month Invoicing- If the retailer has sold two units of stock out of 10, then
the company will supply him with just 2 units.
– Working Capital and Space Needed- Minimum as distributors have just a day’s inventory
to stock.
– Replenishment- Continuous replenishment as P&G has JIT system at distributor level and
at retailer level.