Creating Corporate Standards
Innovation is the lifeblood of The Procter & Gamble Company (P&G), as is evident by the company's 23 $1 billion brands. Dan Blair, director, material and product corporate systems for P&G, is globally responsible for the corporate standards system (CSS) while managing a cross-business unit materials group that works with purchasing for spend pool savings. The CSS system contains all of P&G's specifications, standards and support data necessary to make, pack and ship finished P&G goods around the world.
"Most of P&G's products are value-added contradictions to engineering fundamentals," explains Blair. "Materials are strong yet soft; liquids dispense easily but don't separate and stay where applied; and packages easily open but don't leak." He says that this heritage of creating engineering contradictions to meeting consumer needs goes back more than 100 years, dating to the first U.S. products research laboratory started in 1890 at P&G.
Blair details the focus of R&D at P&G in three strategies:
In the consumer packaged goods industry, the fundamental product development process begins with the creation of a technical specification or "spec" for a product, raw material, packaging material, piece of artwork or the analytical standards and process standards. P&G now has more than 1.2 million specifications to manage across its diverse business.
Through the mid-1990s, P&G focused on growth and globalization strategies, so having functionally similar products with significant variations in actual specifications between regions was common.
In addition to the sheer size and breadth of P&G's businesses around the world, the company also had multiple legacy systems functioning across regions. The ability to share and collaborate was minimal resulting in significant dollar loss and the inability to fully capitalize on what was already known or developed to cut down time to market.
NEW SYSTEM
Blair notes, "Our challenge was clear: to develop a world class specification management system in which all the 'specs' were available when, where and how users needed them." Entering into a pilot learning and partner relationship with ENOVIA MatrixOne to develop this, internal challenges became apparent. P&G realized it had no global data standards nor "pick lists" across divisions. Global performance requirements and infrastructure for the needed system called for basic architecture development, as well as global work process changes. P&G also knew its business would continue to grow and thus, require the flexibility to load new data into the specification management system during the early stages of assimilating an acquisition.
P&G determined it needed a partner that could provide technology for workflow, a product data model that could accommodate complex data, an open architecture and a proven validation history -- a critical element because the majority of P&G's business is regulated. According to Blair the ENOVIA MatrixOne application satisfied these needs, with a chief consideration being the product's flexibility.
The focus of the first phase, completed in 2002 was to gather all of P&G's specs into one location. Then, the most useful data in relationships key to the business was linked to product formulation documents. The second phase, completed in 2005, involved moving to one content scheme across key spec types, and structuring the data for sharing, reporting and analysis.
The third phase focused on linkages so the database repository could be leveraged to feed information to specific user interfaces. P&G now has more than 1.2 million specifications linked globally, providing around-the-clock access to 10,000 plus employees.
SAVING TIME & MONEY
The globally aligned CSS work processes, in combination with a single global database that compiles specifications and knowledge from disparate P&G business units and across multiple suppliers, have enabled P&G to reduce spending on material costs totaling hundreds of millions of dollars; eliminate rework time and reduce specification creation and approval cycles, cutting months off of the average time required to get products to market; and ensure production matches up-to-date specifications, guaranteeing continuous high quality.
Blair says, "Now innovators spend more time innovating, with specs approved three times faster, and they are 99 percent right the first time."
In addition, regulatory compliance is achieved with less effort, suppliers and contract manufacturers are on the "same page" with P&G for savings and fewer quality incidents. Plus, supply chain transparency provides direct material savings plus provides capability to design products "right the first time."
"One specific early win in the area of consolidating raw and packaging material specs illustrates how we wereable to realize these dramatic savings, time efficiency and quality improvements," explains Blair. P&G found that colorants used for molded parts worldwide were a significant spend area - with more than 1,000 dyes or colorants and dozens of specs for blue dyes alone. In addition to costs, each new color target added internal costs for establishing regulatory clearance, verifying technical performance and qualifying the material. Using the global material data now incorporated into CSS, P&G created a standard color selection palette that can be used for all molded parts.
"Working with key suppliers, P&G reviewed and recommended the rational minimum needed for all businesses. Each color selection included all technical and regulatory information, and actual parts were created for color targets to ensure consumer aesthetics are maintained," says Blair.
The results were a tenfold reduction in the number of colorants and a reduction in colorant suppliers to one for colors and one for whites, enabling new package development teams to select from this pre-approved palette. This achievement creates internal R&D and supplier efficiencies, allowing P&G to leverage spend globally for maximum savings.
Blair says that the most significant contribution of CSS specification data to P&G's growth will be delivered by providing linkages and capabilities to the users in the way they need to receive it. Delivering the highest value linkages allows P&G to leverage the database repository to feed information to user interfaces tailored for specific business needs, making the data seamless to users' needs. This functionality transcends disciplines within P&G and across external interfaces as well.
Future linkages that should prove beneficial include initiative "workbooks," packaging development and innovation tools. "We have no doubt that as the value of the system is leveraged, more and more linkage opportunities will surface for future benefits." affirms Blair.