Proctor and Gamble 2011 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2011 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

Simplification
Simplification is also a critical driver of productivity. We’re pursuing
opportunities in a wide range of areas, two of which are the most
far-reaching.
1. Simplifying the Business
We’re simplifying the business by creating standard manu-
facturing platforms with common packages, formulas,
materials, equipment and operational systems. This enables
faster speed to market and concurrent product launches
across regions at a lower cost. We’re moving from more
than  manufacturing platforms as of two years ago to
a target of about  platforms by . We think this is
Product simplification is also a big opportunity. Today, we
have more than , unique products and we believe
we can increase the productivity of our portfolio of offerings
by % over three years. We are investing in new tools and
using deep shopper insight to simplify product lines and
increase consumer and shopper satisfaction. Our research
shows that in certain categories shoppers feel they have more
choices after category options are reduced because there
is less clutter and confusion; they can more easily find the
product that meets their specific need.
2. Simplifying Processes that Support our Business
P&G currently has , Product Supply Planners distributed
over  locations globally. Over the next three years, we
will consolidate planning tasks into regional planning centers
and implement new simulation tools. This centralization and
digitization will improve productivity and create deeper,
more sustainable organizational capabilities. Simplifying our
planning processes and implementing new technologies will
lower transportation and warehousing costs and improve
productivity by % or more.
Packaging simplification is another big opportunity. P&G
spends over $billion annually on packaging materials and
more than $ million on packaging development costs.
The packaging development process touches every function
in the Company, involves more than , employees, and
has significant opportunities for simplification and cost
savings. We are implementing virtualized end-to-end pack-
aging development tools, which we believe can drive a %
reduction in packaging costs and release % of the time
spent today on package design.
Digitization
Our third major productivity effort is dramatically increased use
of digital technology. Our intention is to make P&G the most
technology-enabled company in the world. We are achieving
this by focusing on four key areas: We want to enable one-on-
one relationships with customers and consumers around the
world; we are focused on harnessing the power of real-time
business intelligence to aid decision making; we are accelerating
innovation by using digital technology to create visibility from
molecule-creation to the store shelf; and we are standardizing
best-in-class systems to integrate data.
Digitizing P&G will enable us to manage the business
in real time and on a demand-driven basis. We’ll be
able to collaborate more effectively and efficiently,
inside and outside the Company. And we’ll interact
with consumers, retail partners and others far more
directly and frequently than we can do today.
We’re already seeing the benefits of digitization. We are
increasingly making business decisions faster and more
collaboratively with real-time data. We’re using virtual reality
technologies to reduce cost and increase the speed of
innovation. We are reducing the number of physical product
mock-ups created for new product initiatives. Virtual shelving
and displays are simplifying the way we test our brands with
top customers, and new product modeling tools are improving
our engineering and design productivity.
Employees are connecting faster through high-
definition technology that is reducing the need for
travel by as much as , trips per year, saving
All these productivity efforts are focused on one goal: high-quality
profitable growth achieved on the strength of P&G innovation
and with the financial and operational discipline that you expect
of P&G —and which we demand of ourselves.
The Procter & Gamble Company 5
worth about $ million in savings worldwide.
$ million annually.