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P&G’s five core strength focus
CONSUMER UNDERSTANDING Uncovers the unarticulated needs of consumers
SCALE Drives efficiency and consumer value
INNOVATION Translates consumer desires into new products
GO-TO-MARKET CAPABILITIES Reaches retailers and consumers at the right time
BRAND- BUILDING
Shapes purpose- inspired benefit- driven brands
How important is risk management in your SRM approach? Our SRM methodology clearly addresses managing risk and relationship dynamics – i.e. changes in busi- ness fundamentals, and changes or issues in the health of a relationship. We focus on tools and assessments which provide early warnings and stra- tegically engage our business partners in proactively managing change. For us, one critical activity that we participate in is our robust business continuity pro- gramme – which identifies high risk supply chains and ensures solid plans are in place in the event a supply disruption occurs. How do you measure the effectiveness of your SRM approach? We measure the effectiveness of our SRM approach across a number of different relationship attributes. › We create joint business plans with our most stra- tegic business partners to identify two-three year goals for the relationship and key action plans which will deliver those goals. › Quarterly scorecard metrics are used to measure performance, and are typically a mix of predictive, outcome, quantitative and qualitative measures. › We also use a very comprehensive supplier per- formance management system, which uses multi-functional assessments to evaluate and reward supplier performance against four key areas: commercial, operational, innovation and relationship.
P&G is a pioneer of open innovation – how does this apply to suppliers? P&G focuses on five core strengths required to win in the consumer products industry. We are designed to lead in each of these areas. Innovation is one of these core strengths and is the lifeblood of our company. P&G is the innovation leader in our industry. Virtually all the organic sales growth we’ve delivered in the past nine years has come from new brands and new or improved product innovation. We continually strengthen our innovation capability with a global network of innovation partners outside P&G. More than half of all product innovation coming from P&G today includes at least one major component from external partners. External partners are a significant source of material innovation, product innovation, supply chain innovation, and innovation of services and new business models. Given your reputation for innovation, is there a risk that you are overrun with innovation ideas that turn out to be little more than a sales pitch? We must fuel our innovation pipeline with new ideas, new materials and new services from our external business partners. We welcome those new ideas, and typically have focused resources to help guide the commercial and technical innovation work with our most critical business partners.
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