Procter & Gamble has brought its Supply Chain 3.0 initiative into full rollout across the company as part of the underlying platforms and capabilities it has spent years building, CFO Andre Schulten said on an April 24 earnings call.
The supply chain initiative, launched in 2023, is driving a more complete systems integration from customer order to production planning and material ordering, Schulten told investors. The project applies technology, with only some AI and the rest more basic automation in P&G’s manufacturing and supply chain processes.
This effort is part of a broader plan to tie research and development, supply chain, and procurement together to enable P&G to adjust sourcing, fine-tune its product formulations, and qualify alternative supplies faster and more effectively, Schulten said.
“It took years to build these underlying platforms and capabilities, and we are now in full scaling mode across the company,” he said.
P&G’s goal is to save up to $1.5 billion in cost of goods sold as a result of Supply Chain 3.0, Schulten told investors last October. Previously, executives said the project would also deliver 98% on-shelf and online availability.
The consumer goods manufacturer expects the savings to come from automation that loads and unloads finished products, packaging and raw materials even when the warehouses are unstaffed, Schulten said in the latest earnings call.
At the Barclays Annual Global Consumer Staples Conference last September, Schulten said Supply Chain 3.0 includes installing warehouse technology that increases density by 50% and delivers two to three times more throughput.
In addition, the company has been piloting a four-hour night shift in Berlin run entirely through automation and robotics, one of nine pilots, executives said. Each automated shift can deliver between 15% and 60% productivity improvement, according to Schulten.
P&G has set a 2030 implementation target for Supply Chain 3.0 and is moving as quickly as possible toward that mark, Schulten said on the April earnings call.
“We know it works, and we know what to do,” Schulten said. “We have the technologies available. It’s about how fast do we roll them out. And I think that’s where we’ll push the envelope.”
Other CPG manufacturers are deploying supply chain technology to improve operations while cutting costs. PepsiCo is testing AI and digital twin technologies in plant and warehouse facilities, Hormel Foods is modernizing its supply chain with an AI planning platform, and Hershey is projecting a $100 million inventory cut from technology deployed across its supply chain.
