Procter & Gamble: A Case Study of Third Party Logistics Management

Procter & Gamble is a world consumer goods manufacturer. From 65438 to 0992, P&G entered the China market and established a large-scale production base in Guangdong. For Procter & Gamble, which has just entered the China market, whether its products can be delivered to all parts of the country in time and quickly is an important link for it to seize the China market quickly. In order to save transportation costs, Procter & Gamble seeks railway solutions besides road transportation, which leads to the demand for transportation logistics services.

Analysis:

As a manufacturer of daily products, P&G's logistics service demand has high requirements on response time, service reliability and quality assurance system. According to the logistics service demand and service requirements, there are two main types of logistics enterprises that enter the P&G field of vision: state-owned enterprises and private storage and transportation enterprises that occupy a dominant position in the logistics industry. After investigation and evaluation, Procter & Gamble believes that the state-owned logistics enterprises at that time were single in business, either only engaged in warehousing or only responsible for railway transportation, and the warehousing equipment was backward, the quality assurance system was imperfect, the information technology in transportation was backward, employees lacked service awareness, and the response time and service reliability could not be guaranteed. Therefore, P&G turned its attention to private storage and transportation enterprises.

Scheme:

When selecting the third-party logistics enterprises, Procter & Gamble found that Baogong contracted the railway freight transfer station to provide "door-to-door" service, and its operating characteristics were "quality first, customer first and 24-hour service". Therefore, Procter & Gamble submitted a proposal on logistics demand to Bao Gong, and made a tentative investigation on Bao Gong's logistics capability and service level.

Focusing on the logistics needs of Procter & Gamble, Bao Gong designed the business process and development direction, and formulated a strict process management system to "protect the products of Procter & Gamble", which met the requirements of Procter & Gamble. At the same time, Bao Gong's long-term desire for good cooperation and serious and responsible cooperative attitude were welcomed by Procter & Gamble, which enabled Bao Gong to pass the inspection smoothly. P&G finally chose Bao Gong as its partner, and the two sides signed a general agent contract for railway transportation and began formal cooperation.

In the process of implementing the third-party logistics service, Baogong established a nationwide logistics operation network to provide value-added services for Procter & Gamble to ensure that the goods are operated according to the same operation methods, modes and standards during transportation. After the goods are transported to the destination, Baogong's employees who have received professional training in storage and transportation will receive, unload and deliver the goods, providing "one-stop" service for Procter & Gamble. And in accordance with strict GMP quality management standards and SOP operation management procedures, P&G products will be delivered to sales outlets all over the country quickly, accurately and timely. The initial cooperation between the two sides has achieved quite good results. Bao Gong saved 6 million dollars for Procter & Gamble in one year, and the high-quality and high-standard logistics service demand of Procter & Gamble greatly improved Bao Gong's service level.

With the growth of Procter & Gamble's business in China, the demand for warehouse storage has greatly increased, and Baogong's good operating performance has been recognized by Procter & Gamble, and its warehousing business has been further outsourced to Baogong. According to P&G's logistics demand, Bao Gong plans to design and implement a logistics management system, optimize business processes, integrate logistics supply chain, meet P&G's personalized demand with the mode of "tailor-made, integrated operation and personalized service", improve logistics reliability and reduce total logistics cost. Driven by the cooperation between the two parties, Baogong has established a high-level information technology system to help manage and provide a comprehensive and effective information platform, realize real-time online tracking of key logistics information such as warehousing and transportation, realize seamless docking with P&G electronic data, effectively integrate the operation processes and information of P&G and Baogong, and make logistics more efficient, reasonable and systematic. Dongbao's strict and high-quality logistics service greatly reduces P&G's logistics cost, shortens the order cycle and transportation time, and improves P&G's customer service level. Procter & Gamble has promoted the continuous improvement of Baogong's logistics service level and become a third-party logistics enterprise in China today.

P&G Company chooses Bao Gong as the third-party logistics service provider according to its own needs and cooperates. Under this cooperation mode, the goal of "win-win" has been achieved. With the increasing demand of logistics market and fierce competition in international and domestic markets, the success of Procter & Gamble in applying third-party logistics will set a benchmark for China industrial and commercial enterprises to purchase third-party logistics services and choose logistics service providers.

Conclusion:

Third-party logistics enterprises can reduce logistics costs, shorten order cycle and transportation time, and improve customer response ability; It can also create value for customers. In order to choose a suitable third-party logistics service provider, industrial and commercial enterprises need to accurately define their own logistics needs, then select suppliers that can meet the needs and goals of enterprises, and finally conduct relationship management and performance evaluation on suppliers. The application of third-party logistics in enterprises can not only improve service performance, but also significantly reduce the total logistics cost.