Tide Liquid Term Paper

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Tide

Proctor and Gamble's Distribution System of Tide channel of distributing a product refers to the product's "sequence or marketing intermediaries" that begins after the product has been formulated and created that then pass on the product to the consumer. (Principles of Marketing, 2004, p.5) Proctor and Gamble as a company has recently been commended for using agent-based distribution system modeling. This system is credited with transforming the company. (Anthes, 2003)

According to the HIDC.NewsLetter of 5 May 2004, in an article on distribution systems entitled, "Intelligent Agents "as competition increases and product life cycles shorten" traditional distribution systems "are no longer sufficient for many companies today. Instead, more and more of them are turning to collaboration in supply chains and forming networks of organizations to ensure a competitive advantage. But in such organizational networks, dense and tightly coupled activities increase the difficulty and costs of coordination. Moreover, as the tasks in question become more dependent on individual contributions and on one another, the participants need to be in contact and share information and knowledge." (HIDC, 2004)

This collaboration, complex coordination, and information sharing among disparate organizations have altered P&G's system so fundamentally "that the company no longer even calls it a supply chain. "The Cincinnati-based maker of Tide, Crest, Pringles, Pampers, Clairol and 300 other products" now calls its connections to five billion consumers in 140 countries a supply network. (Anthes, 2003) P&G's distribution system operates like a network, like an Internet, so that all individual distributors are abreast of the information regarding the product.

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When it comes to IT projects, it doesn't get much better than this: Procter & Gamble Co. saves $300 million annually on an investment of less than 1% of that amount. Indeed, P&G's use of agent-based modeling helped it transform its supply chain system so fundamentally that the company no longer even calls it a supply chain but a supply network, much like the internet, and many of the insights that have enabled P&G to transform a chain into a network come from agent-based computer models (Case Study, 2004)

Procter & Gamble, a leader in developing, distributing, and marketing health-care products, was seeking a way to reduce the inventory and lead-time. Nutech solutions provided an agent-based simulation platform by viewing the supply chain as a set of autonomous agents that act according to rules. Agent-based modeling of complex adaptive systems can be applied to simulations of the supply chain in order to improve it. These simulations yielded very promising results for Procter & Gamble and influenced the design of its supply chain. Then the company started a large project to see where Intelligent Agents technology could be brought in to streamline its overall business activities. One potential area of application is cross-organizational sourcing, since Procter & Gamble works with numerous suppliers and customers."

By listening to their distributors, Tide has been able….....

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