Can U B like P&G?

I read a great article in the McKinsey Quarterly today entitled Inside P&G’s Digital Revolution, about how Procter and Gamble is using digital technology and advanced analytics to revolutionize its business.

I encourage you to read the entire article (note: you may have to register), but in case you’re pressed for time, the first paragraph sums things up nicely:

“Robert McDonald is a CEO on a mission: to make Procter & Gamble the most technologically enabled business in the world… [He is] overseeing the large-scale application of digital technology and advanced analytics across every aspect of P&G’s operations and activities—from the way the consumer goods giant creates molecules in its R&D labs to how it maintains relationships with retailers, manufactures products, builds brands, and interacts with customers. The prize: better innovation, higher productivity, lower costs, and the promise of faster growth.”

A few of P&G’s keys to success:

• Enable better decision-making through real time information (or as close to real time as possible)
• Apply advanced modeling & simulation tools to test new product concepts and new manufacturing & supply chain strategies in the virtual world before spending money in the real world.
• Hire people with great analytical skills, then continually train them & develop those skills at all levels of the organization

I’ll add a couple of thoughts of my own.  First, it starts at the top.  P&G’s CEO, Robert McDonald, is not just bought into the strategy, he understands the details and is an active champion for using technology and advanced analytics to drive his business.  

Second, the competition is moving fast so there’s no time to waste.  Get started now.  Don’t wait for perfect data – use what you have today, BUT… do your best to build in data integrity from the beginning so poor data integrity doesn’t come back to bite you later.

Few companies have the resources and capabilities to be like P&G.  But almost any company can use P&G as an aspirational ideal – an example to shoot for as you develop your own analytics strategy.

Ask yourself a few questions about your business:

• How are you using advanced analytics to drive your business? 
• Do you know what parts of your business offer the greatest opportunity?
• What information do you have today that you can leverage for greater insights and improved business results?
• What information that you don’t have today would have the most value?  What’s the next step to getting that data (or at least getting closer to it)?

Until next time…

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York.  Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

© 2011 REanalyze.Inc.. All Rights Reserved.

Highlights from Llamasoft Conference on Supply Chain Design

Last week I attended Llamasoft’s first annual Summer Conference on Supply Chain Design in Ann Arbor, Michigan, along with a couple of days training on their Supply Chain Guru applications.  I met some great people, gained a lot of insight about Llamasoft and their product roadmap, and enjoyed some spectacular early-summer weather in Ann Arbor.

Llamasoft is growing fast, and they are now the only major independent Supply Chain Design software vendor, since the acquisition of LogicTools/LogicNet by ILOG and then IBM, and Optiant's acquisition by Logility. 

Founder, President and CEO Don Hicks talked about (OK, I’ll say it…) changing the paradigm for Supply Chain software.  Instead of the traditional “Planning versus Execution” framework, Don talks about “Design versus Planning versus Execution”.  Planning applications will become increasingly automated and IT driven, cutting across the usual distinctions between strategic, tactical and operational planning.  Meanwhile, Llamasoft is squarely targeting the Design space, which will continue to require human input and creativity.  To that point, late this year they will add Transportation Optimization to their existing capabilities in Network Optimization & Simulation and Inventory Optimization.

The conference featured some interesting keynote speakers:

• Dr. John Gattorna of Australia highlighted his Dynamic Alignment Model, emphasizing  the need to develop multiple Supply Chains – with distinct strategies -- that align with different customer behavior models.  His book Dynamic Supply Chains is available  on Amazon. 
• Astronaut Buzz Aldrin shared some great stories, images and video from the Apollo program and the 1969 moon landing -- and his strong opinions on how we can and must regain the initiative in space exploration.
• Developmental Cognitive Neuroscientist Dr. Bruce Hood talked about how the decision-biases that are hard-wired into our brains can lead people to cling to incorrect beliefs and make decisions counter to all available evidence – something to keep in mind the next time someone questions the “obvious” recommendations from your analysis!

A question for my readers:  What are the pros & cons of building your Supply Chain Design capabilities around software, services and solutions from:

• …a small but fast growing, independent software company focused exclusively on SC Design (Llamasoft)?
• …an established Supply Chain Planning software company integrating an acquired SC Design solution (Logility/Optiant)?
• …a huge global conglomerate integrating a SC Design Solution (itself part of a larger acquisition) with extensive software and consulting resources as part of an aggressive Supply Chain Analytics strategy (IBM / ILOG / LogicNet)? 

What do you think?  I'd love to hear what you have to say!

OK, that’s all for now.  Please visit our web site at www.reanalyzeinc.com.  Until next time…

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York.  Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

© 2011 REanalyze.Inc.. All Rights Reserved.