How P&G stays on top of its game

In 2015, Gartner introduced a new, separate category to its annual Supply Chain Top 25. The list of Supply Chain Masters recognizes companies that exhibited sustained supply chain excellence over the previous 10 years. The first list included just two companies: Apple and P&G, both of which have remained on the list every year since. Of the latter, Gartner highlighted the CPG leader’s history of innovative supply chain practices. Especially noteworthy were “the efficient consumer response (ECR) capability [P&G] built with Walmart in the 1990s” and the blending of “its supply chain and product R&D organizations for a seamless approach to new product development and launch.” 

So, how does P&G stay on top of its game year in and year out? We put that question to Fares Sayegh, the senior vice president of product supply, fabric care and global supply network operations and manufacturing discipline. A 34-year veteran, Sayegh began his career on factory floors in developing countries such as Saudi Arabia, Yemen and South Africa. For the past 20 years, his home base has been Geneva, Switzerland, with leadership roles in business units and supply chain. Today, he oversees global operations for the fabric and home care space, a category that represents about 35% of P&G’s business.

SCMR: How has P&G remained a world-class operation for so long? 

Sayegh: This sounds cliché, but every day we question whether we’re missing something that will make us better. About 28 years ago, we began work on a high-performance work system as the standard for how we run the organization. It focused on leadership, teamwork and doing the right thing. Out of that, we created the Integrated Work System, or IWS. More recently, we developed Supply Chain 3.0, which looks at how to take all of the nodes of the supply chain to the next level of performance. We add into that sustainability, connectivity from the shelf to the consumer and an environment where our people are inspired, valued and given the opportunity to make an impact.

SCMR: What does digital transformation mean to P&G? And when do you apply technology? 

Sayegh: The starting point for IWS wasn’t investments in automation. We started by restoring our equipment to its basic condition when we purchased it. Once everything was delivering the productivity and throughput as when it was new, we asked questions like: Why do we have so many touches? Why does it take so long to do a changeover? That’s the point where we started to apply digital capabilities. Now, we have touchless changeovers. But we couldn’t have done that without also ensuring that we had good materials from our suppliers, good forecasting from our planners and good people to operate the equipment. We did all of those things before we applied automation. If your whole ecosystem isn’t ready for the transition to digitalization, you’re wasting money.

For more on P&G’s supply chain transformation, read: P&G Performs. EY Transforms.

SCMR: We know that a majority of transformations fail. What does it take to do it right? 

Sayegh: It’s not technology. Companies are spending millions on technology and much of it is wasted. You may have brilliant people and the best technology, but if your ecosystem isn’t ready for that transition, you won’t be successful. Our advice is to simplify, standardize and run at the right level of sustainability. Then, you can apply digitalization where it’s needed to take it to the next level, including your people on the factory floor. We’re very clear about where we put our dollars in digitalization. We’ve been very successful at transformation, but it’s a journey and I don’t see an end to it. We have to keep innovating, questioning why we do something this way and keep raising the bar in operational excellence.

SCMR: There is a lot of discussion today around resilience. What has P&G learned about resilience in the last few years.

Sayegh: Everyone started talking about resiliency during COVID. One of the things we learned was that when one market shut down, we could continue to operate because we had supply based around the world. Since COVID, we have refined our forecasting and demand sensing, and we have leveraged all of the capabilities we had already built to take us to the next level. I believe we are more resilient than before. We continually ask if we’re becoming complacent with where we are because that creates a comfort zone. We have to continue to have what I call “productivity paranoia.” We owe it to ourselves to continue to lead in our industry, continue to ask if we’re missing a trend and if we’re ready for the next disruption.

SCMR: You have so many employees that start and end their career at P&G. How important is the P&G culture to your ability to attract and retain talent? 

Sayegh: Culture is very important. Nothing is sustained when you have a revolving door. We have a culture where it’s not uncommon for people to start from the university and then retire after 40 years. P&G has created a culture of purpose, values and principles that we drive in everything we do. We raise the bar on standards and we raise the bar on ethics because we want to be a force of growth and a force of good. We thrive every day to link every person’s work to what matters. And finally, we bring in people from different walks of life and still operate at that standard. That’s not easy, but we have operationalized it. Now, some organizations talk the talk, but don’t operationalize it.

SCMR: You began the interview talking about the time when you and the management team put on coveralls and worked on the floor one day a week. How important is it to be present? 

Sayegh: Coming out of COVID, I started traveling to all of our locations. In fact, when this interview is over, I’m getting on a plane. People have said to me, “Fares, can’t you just do this on Teams?” I think you have to be on the factory floor and meeting with your teams, especially the younger generation, to inspire and engage them. Culture matters, and culture is about the repetition of behavior. You bring people forward; you ask the right questions to drive a certain way to do work that is driven by purpose, values and principles. If you do that in a systemic, sincere way, your culture will deliver.

Click here to read more about P&G’s alliance with EY to enable digital transformation at other organizations.

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