P & G Case Study

1. Define acronyms CRP, EDI, OSB, ECR and explain. CRP stands for "continuous replenishment program". CRP was a process that P&G created in order to increase logistic efficiency. The process consisted of using electronic data interchange (EDI), which is an electronic system that transmits data instantaneously from one business to another. The use of EDI was expanded to help automate P&G 's ordering, shipping, and billing system (OBS), which was a system that was the hub for generating orders and shipments, as well as keeping track of billing. ECR stands for "Efficient Customer Response". ECR represented

3. What were the key decisions taken by P&G in relation to the distribution channel? Could a mid-sized manufacturer have used this effort? P&G made three major decisions in relation to the distribution channel. The first decision was the implementation of CRP, which was focused on improving supply logistics and reducing channel inventory. This new process represented a major change in channel ordering and logistics and established the basic principles of CRP. In order to improve logistics in the channel, P&G began shipping products based on retail demand data, placing orders automatically for the retailer. Second, P&G rewrote their OBS.A key element of the new ordering process was the development of common databases for product, pricing and policy specifications. The common databases developed to support simplified pricing, were designed to provide data directly to the customer 's own system electronically. Third, P&G moved from Brand to Category Management. Multiple brands were combined into product categories under the responsibility of a category manager. Brand managers maintained responsibility for advertising and limited promotional programs, but category managers established overall pricing and product

P&G has changed their strategy to a large extent. They went from a company that was focused on brand management to a company that focuses on category management. Instead of relying completely on branding, they decided to concentrate on customer satisfaction to drive sales by restructuring SKU 's that were tailored to customer 's needs. The shift from buyers to category managers positioned P&G to identify higher selling products in each category and maximize revenue generation by demonstrating to the retailer 's that P&G brands generated more profit per unit of shelf space compared to other products in the same category. The Sale of the CRP system to IBM was a major strategic move by P&G to standardize the industry as a whole, which in turn allowed P&G and its customers to improve internal processes and