Feeding The PipelineFeeding The Pipeline
Procter & Gamble uses IT to nurture new product ideas
February 21, 2003
One area in which Procter & Gamble has been particularly aggressive is in using technology for product life-cycle management, the art of creating and nurturing a brand. The reason is simple. "PLM for this industry is life or death," says Kevin O'Marah, research fellow at AMR Research. "These companies live or die by their brands. If they can't get value out of all of their marketing and create new, profitable products, they'll lose their edge."
While something of a moving target, product life-cycle management is "mechanizing and automating the knowledge components, and the flow components, within the bringing-a-product-to-market phases," CIO David says. "We're doing that tremendously well right now." That's primarily thanks to a system from MatrixOne Inc. P&G started experimenting with the software about three years ago to manage technical specifications. It lets P&G create a single database that holds product specifications used by some 8,000 people across all business units. It includes the work processes necessary for product creation, review, approval, distribution, and storage. Creating such specs can be laborious and complex, since they include everything from packaging and test methods to country-of-sale clearances and raw materials, says Paul Gilmartin, VP of consumer products industries at MatrixOne.
Business technology must align itself with the needs of the consumer, Procter & Gamble VP Dixon saysP&G previously relied on eight IT systems and 29 work processes to manage all that information and workflow. Now the company has cut costs on things such as packaging materials, pigments, and chemicals used across multiple products and divisions. Reusing specs that have already been validated by the Food and Drug Administration chops time out of the development process and gets products to market much faster. While it's speeding up product development, P&G hasn't stopped honing its vaunted supply chain. "Full data synchronization -- that's the vision," David says. P&G wants to ship products based on actual sale results, not forecasts. To get closer to that kind of real-time business, P&G is working on two fronts. First, it's looking to create electronic product catalogs that suppliers and customers -- the Wal-Marts and Kmarts of the world -- can tap into globally. Second, P&G and David are working with standards bodies such as the UCCNet product-registry system, with the Transora online exchange for consumer goods, and with retailers to advance supply-chain and data-synchronization standards. "We want every kind of transaction we do with our customers pulling through the supply chain to be synchronized," David says. P&G is also an early tester of radio-frequency ID technology, the microchip-sized devices that promise to revolutionize supply-chain systems by letting manufacturers track and manage inventory down to the individual product. Like everything at P&G, these initiatives come back to understanding the customer. Thirty million times a day, a shopper looks at a P&G product -- then buys it or a rival's. That works out to a million or more Moments of Truth every hour. For Dixon and his IT colleagues, that's a good reason for being. Photos by Jim Callaway
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