Global Effectiveness Initiatives
The main purpose of strengthening global was to streamline work processes and mitigate non-value added costs and eliminate duplication, while rationalizing its distribution and manufacturing costs. However, to successfully implement its global effectiveness initiatives, the company sort to gain hundreds of suppliers, while maintain over 50 product lines and 60 plant. Additionally, developing 15 distribution channels and dividing its corporate customers into 150 customer zones.
The P&G has been one of leading company in the world having the 300 brands around the world with the $33.5 billion revenues in 1995. But due to many acquisitions in the past has given excess unutilized capacity to the company. The two largest areas where the company was considering to apply a new well-structured model of the supply chain that would deal with the increasing costs of the doing business, and supply chain management addressing and restructuring the system through organized and under user interactive alternative options generating computer system. Consequently, the company would have a most interactive system that would help to create the most suitable options to be implemented through the analyzing of given data in the system by the teams of different product categories.
The system would assist executives in designing, and planning of the distribution center location, and product sourcing as both are two pillars (models) of the new paradigm, having unique characteristics, and process. Meanwhile, the effective combination of the both models would bring strengthening global effectiveness (GSE) to drive out non-value added costs and eliminate duplication. Furthermore, the objective was to provide models that would support the products strategy teams and support the team of experts in transportation and distribution, warehousing, and customer allocation problem. Meanwhile, the overall the combined objective was to ensure the constructing of the framework of complete supply chain solution across the product strategy and distribution centers.
Distribution Center Location Model
The distribution model relates to the increasing customer’s demand for the products, and increasing competition in the market was pushing the model ahead of constructing the supply-chain study. Similarly, the lake of data limited the strategic location choices that would have helped in creating the strategic distribution centers (DC) at most valued added locations. Because of the DC customer site, customerservices, and sole sourcing as well.
On the other hand, the model assigns the customers to the DC’s. So, the single customer zone is assigned to distribution centers. However, the model determined the proportion of each customer’s demand that was satisfied by the shipments by plants directly. Similarly, in the determination of the cost coefficients for the model, so the cost includes the managerial handling cost, inventory cost, transportation costs, and other duties associated with other operations in the distribution of the products direct to the customers, or the distribution centers.
So, the strategic selection of the locations, around the North America, would reduce the cost of the customer services, and distribution centers. Hence, the new model with the help geographical information system would allocate, and provide best available alternative options to choose the locations of the distribution centers; that would handle all customer zones…………………
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