Glamorous and un-nerdy in a world of system-obsessed jargon-spouting men, is how “The Grocer” described Lisa Dowding, when she became head of logistics at Procter & Gamble. And, while some might cavil at the description of the average logistician, there is no doubt that Dowding brings a fresh perspective to the discipline.
Procter & Gamble turns over some £34.4 billion a year producing a profit of almost £4.4bn. It produces some of the world’s most well-known brands including: Head & Shoulders, Olay, Wella, Gillette Old Spice, Crest, Oral-B, Vicks Fairy, Pampers, and Duracell.
At the core of Procter & Gamble’s business strategy is a theory developed by chief executive AG Lafley known as the “two moments of truth”. This says that P&G brands face two moments of truth every day: the first at the store shelf, when shoppers choose which brands to buy; and the second at home, when consumers decide whether its products deliver on the brand promise. The company believes that winning at both moments of truth “demands deep shopper and consumer understanding” and focuses substantial resource in research in this area.
It says: “Winning at the first moment of truth gives us the chance to win at the second. Winning at both moments of truth—time and time again—is how P&G grows.”
Dowding points out that the first moment of truth is critical for the supply chain. “Once you have that principle, everything follows from it. If all the parties believe in the principle then you have to work together to achieve it.”
Since taking over the logistics function, Dowding has focused on increasing the level of collaboration with retailers – in particular the amount of joint action plan development.
She points out that the basic premise in working with the retailer is to think from the shelf backwards. “It’s a real focus of ours – the relationship has to drive value.
“Promotions and so on are where you find the challenges. Demand visibility and forecasting is still a huge area of opportunity. Industry data shows that 90 per cent normal availability drops to 75 per cent on promotions. We need to drive more transparency. Joint forecasting is a step forward,” she says.
The logistics function has an essential role to play in supporting commercial innovation. Retailers want differentiators with promotions to support products – for example twin packs, triple packs and free standing displays. A prime example of this was the launch of the new Gillette Fusion razor. With such a major innovation, all the major supermarket groups wanted to be first to have the product on sale. As a result, P&G had to ensure that no-one got an unfair advantage. And that meant that supplies had to be delivered all at the same time – complete with all display material.
“You don’t normally have to move razor blades very quickly,” says Dowding.
It took a year of planning to ensure the smooth roll-out. The trucks started rolling at midnight of launch day and the first product was on sale at fourteen minutes past seven in the morning.
Dowding also spends a lot of time working with internal business partners. Procter & Gamble has 50 manufacturing sites in 15 countries organised into regional product groups. P&G has developed a structure designed to remove many of the traditional overlaps and inefficiencies that plague many large companies. There are three core elements to this. Global Business Units focus on consumers, brands and competitors. They are responsible for innovation, profitability and shareholder returns. Market Development Organisations are charged with knowing consumers and retailers in each market where P&G competes and integrating the innovations flowing from the Global Business Units into business plans. Global Business Services use P&G talent and partners to provide business support services.
The takeover of Gillette in 2005 meant a major integration programme that has taken some 18 months. “We adopted a phased approach and we are now in the middle of the physical distribution.”
Optimising the logistics system and removing cost is also a critical issue for Dowding. “In the first phase we took 300,000 truck miles off the road.”
Dowding is open to looking at new ideas, but she is wary of those schemes that simply push cost up the chain.
“Does what you propose drive value in the supply chain. Some idea just transfer costs and are not joint value creating. If you put cost into the supply chain it is going to end up with the consumer,” she says.
- Lisa Dowding is head of logistics – UK and Ireland for Procter & Gamble. She joined the company in 1990. Her career has covered a wide range of supply chain activity including demand and supply planning, order management, customer logistics development, CPFR, and global supply chain capability, spanning multiple business units.
- In her 16 years at Procter & Gamble she has worked in a number of locations in the UK and Europe including two years in the European headquarters in Geneva as customer service/logistics director for the WE Fabric and Homecare business.
She became head of logistics UK & Ireland in 2005.