ASSESSMENT FRONT SHEET

LONDON CHURCHILL COLLEGE

Programme: BTEC Higher National Diploma (HND) in Business

Unit Number and Title: Supply Chain Management (Unit 14)
Unit Level: QCF Level 4
Module Tutor: Sheraz Khan
Email: sharaz18@hotmail.com
Date Set: 18/03/2011
Learner’s name and statement of authenticity

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I certify that the work submitted for this assignment is my own. Where the work of others has been used to support
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LONDON CHURCHILL COLLEGE

LEARNER’S BRIEF

Programme: BTEC Higher National Diploma (HND) in Business

Unit Number and Title: Supply Chain Management (Unit 14)
Module Tutor: Sheraz Khan
Email: sharaz18@hotmail.com
Date Set: 18/03/2011
Key dates

Distribution date: 18/03/2011

Submission date: 30/06/2011
Return date: 4 weeks after submission

Introduction

The aims of this assignment are to measure the outcome of students’ learning in terms of
knowledge acquired, understanding developed and skills or abilities gained in relation to the
achievement of the learning outcomes.
Learners are expected to use their acquired knowledge to prepare a business report of not less than
3,500 words, clarity of ideas and presentation would attract extra marks as well as use of own
initiative and real and imaginative scenarios to demonstrate understanding of the course.

COURSE WORK- PROCTER & GAMBLE

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Zeroing in on the first moment of truth
Procter & Gamble, a world leader in consumer packaged goods, sells nearly 300 brands in more
than 160 countries. It has sales of $40 billion a year and 130 manufacturing sites around the world.
P&G measures consumer satisfaction at two levels, which it calls the two “moments of truth.” The first
moment of truth occurs when the consumer reaches the shelf and finds that the desired product is, or is
not, available. This is a critical moment, because if the product is not immediately available, the consumer
usually moves on to buy a rival product. The second moment of truth depends on the buyer’s satisfaction
when consuming the product. This, too, has a crucial impact on consumer loyalty, but is beyond the scope
of this case study. Detailed consumer surveys in July 2000 told P&G that in 55% of cases (75% for
promotional items), consumers were not satisfied when they looked on the shelf for the products they
wanted. The exact product variant, in the size and packaging the shopper sought, was available less than
half the time. Something had to be done.
Responsibility for having the product on the shelf every time a shopper wants it used to be seen as purely a
matter for the retailer. If retailers got their forecasts wrong and ordered the wrong volumes, the
manufacturer was not aware of the problem, or at least not concerned about it. But, at the end of the day,
both the manufacturer and the retailer were losing. P&G was ahead of the pack in realizing the significance
of this, though other manufacturers are now also focusing on the end consumer, which is one reason why
the industry is seeing so many new CPFR (collaborative planning, forecasting and replenishment) and VMI
(vendor-managed inventory) programs.
Top managers in P&G began to realize that the company’s supply network needed to be re-engineered so
that it was genuinely responsive to consumer demand. This was especially important for promotional items,
because of the cost of merchandising and promotional activities, and the long-term negative impact of
stock-outs on consumers. After customers have been unable to buy the desired product and have switched
to alternatives, it becomes hard to persuade them to return to buying the initial product when they go
shopping again. P&G decided that sophisticated demand chain management, establishing direct
connections between sales and supply chain business processes, could be the key to maintaining its
leading position in the consumer packaged goods industry. As a result, a multi-level initiative was launched
consumer-driven supply network” (CDSN) program.

Retail changes put pressure on the supply chain

For the major consumer packaged goods manufacturers, the strategies that are currently being pursued by
the world’s most competitive retail chains are changing the game in two important ways.
• As consumers come to expect a greater assortment of product options, retailers are responding with
greater product differentiation, driving up service level expectations.
• Cash requirements are creating pressure for shorter order-to-delivery cycles and a move towards flow
through distribution networks. These trends are already beginning to eliminate the safety stocks that used
to be held in reserve in the retail supply network. This situation creates several new problems that P&G and
other manufacturers need to come to terms with.
• Reaction times across the supply network have been compressed.
• Current processes cannot move fast enough to deliver what retailers need.
• Supply decisions require timely, detailed information that is not usually available today.
Optimizing supply chain performance demands a radical new look at the way the partners in the supply
network collaborate, involving retailers, manufacturers and service providers. P&G’s aim has been to
create adaptive, responsive supply networks that will link together sales and supply processes, inside and
outside the organization, to improve product availability. This will allow it to develop demand chain
management capabilities, especially for promotions. Promotional items are the highest priority, because of
the large amounts of money involved in marketing programs. If manufacturers cannot deliver the product,
they lose all the growth that should be generated by their marketing promotions, however much demand is
stoked up.

New thinking, new techniques, and new technology

P&G’s vision of a consumer-driven supply network has two essential elements.
• Building collaborative supply chains at several levels (local market and global markets, for example
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• Ensuring that manufacturing sites serving both local and global supply networks are highly responsive to
changes in demand, based on real-time data from the stores.
Links between supply chain planning and supply chain execution processes are critical. In the
transportation area, P&G expects a lot of change, including improved collaboration with logistics
out sourcers and more use of techniques such as cross-docking. This system, under which inbound trucks
are unloaded and the goods are sorted and loaded straight onto outbound vehicles, without ever being put
into store, can be used to cut inventory and handling costs, as well as delivery times. Daily planning will
give way to continuous plan-make-ship processes, which will demand improved loading techniques to
make efficient use of vehicles as lot sizes become smaller.

In the short term, P&G expects to see supply networks based on relationships, rather than entirely owned
by manufacturers. This kind of collaborative organization offers the flexibility to vary capacity according
to short-term or last-minute needs. End-to-end optimization is essential, as there is no point in optimizing
one component (e.g. production responsiveness) at the expense of another (e.g. delivery and transport costs.
In export markets, with their longer replenishment lead times, this kind of improvement can be difficult to
manage. But these are the very markets that may also offer the biggest rewards in terms of inventory
reduction and improvements in availability.

In P&G’s vision of the consumer-driven supply network, daily demand updates provide timely warning of
changes in product consumption. To make the CDSN work, this information must then be rapidly
integrated into replenishment plans, internally and for partners and suppliers. P&G is also piloting new
distribution requirement planning techniques that will make it easier to understand product requirement
implications across the distribution network.

For the CDSN idea to become a reality, some organizational changes were necessary, as existing
processes could not keep up with the new business targets for customer and consumer service. But it was
also clear that there were technology issues that must not be forgotten. The battle cry of “Business strategy
first, technology second” is now accepted wisdom, but changing the business strategy would not have been
feasible without changing the technology, too. Achieving “optimization” across the supply and demand
chains requires network collaboration between partners, and a set of tools that will help and facilitate that
collaboration. These tools must include a harmonized business applications portfolio, including, in P&G’s
case, a globally standardized ERP platform predominantly based on SAP software.
The final element required to make the CDSN concept work is technology for real-time tracking of
products, cases and pallets within a manufacturing operation. P&G is one of the sponsors of MIT’s Auto-
ID Center, which is working to develop cheap radio-frequency ID tags that can be built into packaging to
provide rea ltime demand monitoring from the retailer’s shelves all the way back through the supply
network.

Assignment Questions

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1): Explain the importance of effective supply chain management in achieving an organisation
such as Proctor & Gamble’s business objectives.(P1)
2): Explain the link between supply chain management and business functions in an organisation
(P2)
3): Discuss the key drivers for achieving an integrated supply chain strategy within this
organisation. How can you use key drivers to achieve efficiency and responsiveness? (P3)
4): Evaluate the effectiveness of strategies used by the organisation to maintain supplier
relationships (P4)
5): How does P&G use information technology to create strategies to develop the organisation’s
relationship with its suppliers (P5)
6): Explain how P&G can develop systems to maintain its organisation’s relationship with its
suppliers (P6)
7): Assess how information technology could assist in integrating different parts of the supply
chain of this organisation (P7)
8): Evaluate how information technology has contributed to the management of the supply chain
for P&G? (P8)
9): Assess the effectiveness of information technology in managing the supply chain of the
organisation (P9)
10): Explain the role of logistics in the supply chain management of Proctor & Gamble (P10)
11): Evaluate the procurement practices within an organisation such as Proctor & Gamble (P11)
12): Discuss the factors that must be considered when improving logistics and procurement
practices in an organisation such as Proctor & Gamble (P12)
13): Plan a strategy to improve the organisation’s supply chain (P13)
14): Assess how a supply chain improvement strategy will benefit overall business performance in
Proctor & Gamble (P14)
15): Explain how barriers will be overcome in an organisation as Proctor & Gamble when
implementing a supply chain improvement strategy

16): Identify and apply strategies to find appropriate solutions to improve Proctor & Gamble’s
Supply Chain management. (M1)
17): Select/design and apply appropriate methods/techniques on how P&G can improve its
relationships with its suppliers and customers. (M2)
18): Research and present appropriate findings which illustrates how P&G integrate the use of IT
in managing their supply chain. (M3)

19): Use a critical reflection to evaluate your solutions in improving P&G’s Supply Chain
Management. Provide clear justifications for your overall conclusions (D1)
20): Suggest recommendations you can make to P&G in managing and organising their
Procurement & Logistics within their organisation and how this will inevitably improve
relationships with both suppliers and customers (D2)
21): Demonstrate how IT can be applied more efficiently within an organisation as P&G and what
new technologies you would recommend they use to improve efficiency and responsiveness. (D3)

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Learning outcomes, assessment and grading criteria
Learning outcomes and criteria covered by this assignment:
Out comes
L01.
Understand the relationship
between supply chain management
and organisational business objectives
L02.
Be able to use information
technology to optimise supplier
relationships in an organization
LO3
Understand the role of information
technology in supply chain
management
LO4
Understand the role of logistics and
procurement in supply chain
management
LO5
Be able to plan a strategy to
improve an organisation’s supply
chain
Merit Descriptors
M1 identify and apply strategies to
find appropriate solutions
M2 select/design and apply
appropriate methods/ techniques
M3 present and communicate
appropriate findings
Assessment criterion for pass
1.1 explain the importance of effective supply chain
management in achieving organisational objectives
1.2 explain the link between supply chain management and business functions
in an organisation
1.3 discuss the key drivers for achieving an integrated supply chain strategy in
an organisation
2.1 evaluate the effectiveness of strategies used by an organisation to maintain
supplier relationships
2.2 use information technology to create strategies to develop an
organisation’s relationship with its suppliers
2.3 develop systems to maintain an organisation’s relationship with its
suppliers
3.1 assess how information technology could assist
integration of different parts of the supply chain of an
organisation
3.2 evaluate how information technology has contributed to the management
of the supply chain of an organisation
3.3 assess the effectiveness of information technology in managing the supply
chain of an organisation
4.1 explain the role of logistics in supply chain management in an organisation
4.2 evaluate procurement practices in an organisation
4.3 discuss the factors that must be considered when improving logistics and
procurement practices in an organisation
5.1 plan a strategy to improve an organisation’s supply chain
5.2 assess how a supply chain improvement strategy will benefit overall
business performance in
an organisation
5.3 explain how barriers will be overcome in an organisation when
implementing a supply chain improvement strategy
Distinction Descriptors
D1 use critical reflection to evaluate
own work and justify valid
conclusions
D2 take responsibility for managing
and organizing activities
D3 demonstrate convergent/lateral/
creative thinking
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Achievement of a pass grade
A pass grade is achieved by meeting all the requirements defined in the
assessment criteria for each individual unit.

Achievement of a merit or distinction grade

All the assessment criteria and merit grade descriptors need to be completed
within a unit to achieve a merit grade. All the assessment criteria, merit and
distinction grade descriptors must be completed within a unit to achieve a
distinction grade.

Assessme P1 P1 P1 P1
P1 P2 P3 P4 P5 P6 P7 P8 P9
nt criteria 0 1 2 3
Requiremen 3.3 4.1 4.2 3.5 4.4 4.3 2.1 1.1
3.1 3.2 3.4 1.2 1.3
ts

Grading M M M
D1 D2 D3
criteria 1 2 3
Requiremen 1.5 5 3.7
3.6 1.4 2.2
ts

Plagiarism and Collusion

Any act of plagiarism and collusion will be seriously dealt with according to
the regulations. In this context the definition and scope of plagiarism are
presented below:
“Using the work of others without acknowledging source of information or
inspiration. Even if the words are changed or sentences are put in different
order, the result is still plagiarism”. (Cortell 2003)
Collusion describes as the submission of work produced in collaboration for an
assignment based on the assessment of individual work. When one person
shares his/her work with others who submit part or all of it as their own work.

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 Extension and Late Submission
If you need an extension for a valid reason, you must request one using a
coursework extension request form available from the college. Please note
that the lecturers do not have the authority to extend the coursework
deadlines and therefore do not ask them to award a coursework extension.
The completed form must be accompanied by evidence such as a medical
certificate in the event of you being sick.
Support materials

Textbooks
• Chaffey, D — E-Business and E-Commerce Management — (Prentice Hall, 2002)
ISBN: 0273651889
• Lauden, K C and Traver, C G — E-Commerce: Business, Technology, Society —
(Addison
Wesley, 2002) ISBN: 032112202X
• Morath, P — Success @ eBusiness — (McGraw Hill, 2000) ISBN: 0077096258

Other useful texts

• Cumming, T — Little e, Big Commerce — (Virgin Publishing, 2001) ISBN:
0753505428
• Salter, B and Langford-Wood, N — A Simple Guide to e-Commerce — (Prentice Hall,
2001) ISBN: 0130286494
• Schneider, G P — Electronic Commerce — (Course Technology, 2002) ISBN:
0619063114
• Sleight, S — Moving to E-Business — (Dorling Kindersley, 2001) ISBN: 0751312150
• Turban, E et al — Electronic Commerce — (Prentice Hall, 2002) ISBN: 0130984256
Websites can be useful in providing information and case studies (eg www.bized.ac.uk which
provides business case studies appropriate for educational purposes)

Websites

• China 'yet to embrace e-commerce' - from the BBC

(http://news.bbc.co.uk/1/hi/business/4446278.stm)
• Statistics on e-commerce - from the Office for National Statistics (ONS)
(http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=6645)
• Briefing paper on e-commerce - from the Institute of Development Studies
(http://www.ids.ac.uk/ids/bookshop/briefs/brief14.html)
• www.phillipallan.co.uk
• http://www.gerrymcgovern.com/nt/class/ecommerce.htm
• http://www.cl.cam.ac.uk/teaching/0708/ECommerce/
• http://www.dcs.bbk.ac.uk/~gmagoulas/studyguide_E-com.htm
• http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073861197&r.s=tl...
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