Gillette operations have been defined more by marketing and promotions; the demand is governed by pricing and marketing strategy. Before the launch of Gillette Guard company pushed its products through retails channels and focused on discounted price and promotional activities. After achieving economies of scale more products is pushed forward resulting in inventory build-up at retail channels. The retailers will also do forward purchasing due to discounted product this leads to products inventories sitting in the supply chain.
Indian landscape is governed with decentralised supply chain which leads to additional time, effort and money involvement of sales representative to deal with order, shipping and billing. Moreover, the products are made to stock in distribution centre.
Reorganisation effort in 2005 includes making of GBU’s (responsible for manufacturing and marketing and product innovation) and MDU’s (includes local marketing and integrating global programs to these markets) MDU’s are organised by geography thus focusing more on local retailers and customers.
Since there was no potential increase in market share and volume, company focused on below mentioned points:
- Focusing on decreasing the quantity of Stock keeping units, while keeping up the ideal item combination to take care of customer’s demand.
- To utilize statistical surveying and geo-statistic data to settle on better choices about new-item improvement.
- To keep up steady and unsurprising estimating and debilitate exceptional advancements to enhance proficiency in the inventory network and manufacture shopper’s image steadfastness.
- Efficient (persistent) renewal, to move to without a moment to spare stock administration.
After the acquisition of Gillette by P&G the correlation in business strategy, operation and practices is depicted in the below figure.
Thus looking at above mentioned factors they have focused on minimising complexity to improve demand and supply planning process. This was achieved by operating as supplier to retailers and wholesalers, selling through these channels. Company followed made to forecast for its manufacturing orders and cover volatility and variability in demand and supply by supplying to distribution centres at the time of replenishment and owning warehouse and distribution centres. Depending on product attributes, some are manufactured by 3 party vendors. Although, manufacturing of razors and blades were in-house, while packaging was outsourced and postponed until the customer’s orders are made.
DISTRIBUTION OF GILLETTE IN INDIA AFTER REPOSITIONING
After the launch of Gillette guard company launched a business model considering Indian landscape, few highlights were production is done locally to control manufacturing and supply chain costs, resulting in razors and blade cartridges selling for 15 and 5 rupees, respectively.
Company focused on following operational objectives to strengthen its network of millions of Indian kiranas, or local shops.