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P&G Decision Making Skills

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Submitted By josh1525
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1. What were the key decisions taken by P&G in relation to the distribution channel?
P&G started testing different methords to change the way merchandisers could order products. In 1985, P&G tested a new approach to channel logistics for replenishment ordering with a moderate-sized grocery chain. This test involved using EDI. EDI,(electronic data interchange) to transmit data daily from the retailer to P&G on warehouse product shipments to each store. P&G decided to use shipment information rather than shipping based on retailer-generated orders, to determine the quantity of products to be shipped. This did reduce costs in inventory, and labor, but however, it ended up costing P&G more. Then after another test, they decided to expand on CRP innovation. Mass merchandisers generated interest from other retailers in the new process. CRP started with diapers but then expanded rapidly to other products. Not only did this reduce costs, but increased grocery sales as well.
2. How important are the new information technologies in P&G’s efforts?
The new technologies were very important. Increased sales were an important benefit of the CRP program for P&G and its distributors. EDI alone is not beneficial, but when implemented in parallel with process and systems reengineering, it can become a powerful tool. EDI provided an essential platform for CRP operations. EDI was a good and easy first step. As mentioned in number one, these technologies sparked the interest of others, and all begin to join in. Increased sales and expansion, instead of just the diaper, were the outcome of these technologies.
3. To what extent has P&G changed its strategy to take advantage of ECR?
CRP was an important element of the ECR vision. The ECR report ran in January 1993, suggested that 38% of the $30 billion in savings projected from implementing ECR in the grocery industry could be realized through more efficient...

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