P&G establishes special logistics centers for emerging markets

As part of its distribution strategy for serving emerging markets, Procter and Gamble has set up "control towers" to help it manage logistics in those regions. In a keynote address at the CSCMP Europe 2011 Conference held in Barcelona, Spain, earlier this month, P&G executive Namrata P. Patel described control towers as locations that provide visibility into inbound and outbound distribution flows.

The consumer products company worked with two logistics service providers to set up one "tower" for Central and Eastern Europe and another for Africa and the Middle East, said Patel, who is the director of customer service and logistics for those regions. The control towers were established to manage the flow of product to the distributors that sell P&G's products in those regions. The concept has produced enough savings in distribution costs that the control towers have paid for themselves, she said.

Because P&G wants to become a key provider in emerging markets and wants to get products "into the hands of the poorest consumers," Patel said, her company is working hard on a distribution strategy that's based on the assumption that those consumers can't afford to pay an extra cent for waste in the vendor's operations. That strategy involves working with distributors to focus on customers; delivering an ongoing, sustainable "breakthrough" in logistics costs; staying agile in challenging times; and building a lean but strong supply chain organization in developing regions of the globe.