P&G's Evolving Perfect Order

Oct. 14, 2011
In order to keep in sync with their customers, P&G created SAMBC -- Service As Measured By the Customer.

Realizing that sometimes P&G's view of how they measured customer satisfaction did not always coincide with how the customer was measuring performance, the company has evolved its thinking.

At the Annual Global CSCMP Conference held last week, Deirdre White, associate director, customer service operations and Dale Rogers, professor of Logistics and Supply Chain at Rutgers, explained the new Perfect Order.

"As any supply chain matures, it becomes more complex and difficult to manage. The scope dramatically expands requiring both new tools and techniques and the need or increased visibility into the process," explained Rogers.

Rogers pointed out that if a company was to measure all of the various aspects of the Perfect Order and scored 99%, that actually translates to a 90% customer satisfaction rate. Many companies require their suppliers to score in the high 90's.

"We found that when we internally measured how well we hit certain metrics, such as on time delivery, we were doing great. But it turns out the customer was measuring it in a different way, and they were expecting more from us," explained White.

For example P&G considered an order on time when it was dropped off at the customer's location. However one of their customers didn't count it as on time until it was delivered to their distribution center, thus creating very different results.

In order to keep in sync with their customers, P&G created SAMBC - Service As Measured By the Customer.

"We want to be best- in- class suppliers. Our customers' measurement becomes our measurement," said White. "We set out to collaborate more closely with our customers while adhering to standards of operational excellence."

Rogers pointed out that many companies become too internally focused. "In order to keep our own management happy we turn most of our attention to internal processes. We have seen clear examples of how this thinking is detrimental. When industries don't pay attention to customers, as the auto industry demonstrated, they lose ground. "

P&G set out to ensure that its focus stayed external so in addition to establishing tools for assessment and tracking, they developed a framework for evaluation.

Identify Early Warning Systems
Daily, weekly and monthly triggers were set up.

This involved creating single points of contacts with the customer as well as specific action plans.

Expand Visibility
Visibility also included making sure that production understood the customers' needs.

Supply Chain Collaboration
P&G moved their metrics to what the customers were using.

Customer sustainability
This involved making sure there were monthly contacts with customers.

"SAMBC is a journey. We have been doing this for a couple of years. When we first started we were delivering 13% of what the customer measured and now we are at 71%. This method is now sustainable," said White.

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