P&G establishes logistics "control towers"

As part of its distribution strategy for serving emerging markets, Procter & Gamble (P&G) 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, P&G executive Namrata P. Patel described control towers as locations that provide visibility into inbound and outbound distribution flows.

The 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.

P&G wants to become a key provider in emerging markets, Patel said. To accomplish this, her company is working hard on creating a distribution strategy that's based on eliminating all waste in the vendor's operations because most of the consumers in those regions can't afford to pay any extra cost. 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.