Procter & Gamble

Four billion times a day, P&G brands touch the lives of people around the world. Familiar brand names-Tide, Crest, Gillette, and 300 more are supplied to 180 countries via 500 supply networks. Over the past ten years, Procter & Gamble has leveraged its cross-functional organization structure with operations research to reduce inventory investment significantly. Savings were achieved in a two-step process. First, spreadsheet-based inventory models locally optimized each stage in the supply chain. Since these were the first inventory tools installed, they achieved significant savings and established P&G's scientific inventory practices. Second, P&G's more-complex supply chains implemented multi-echelon inventory optimization software to minimize inventory cost across the end-to-end supply chain. In 2009, a tightly coordinated planner-led effort, supported by these tools, drove $1.5 billion in cash savings. Today, more than 90% of P&G's business units utilize these inventory management tools, and plans to use multi-echelon tools in 65% of those businesses in the next three years.

Procter & Gamble: Ingrid Farasyn, Joel I. Kahn, Oscar Rosen, William Tarlton, Wim Van de Velde, Glenn Wegryn
Boston University: Sean Willems, John J. Neale
Optiant, Inc.: John Ruark
Havard School of Public Health: Salal Humair

The INFORMS Prize is awarded to The Procter & Gamble Company for its integration of OR/MS principles into the decision making structure of the firm, to tackle issues such as global manufacturing site location and sourcing, inventory management, supply chain design, and consumer behavior analysis. Cost savings have been pronounced, helping P&G to grow and manage the complexity of a $50 billion organization operating in 80 countries. P&G is recognized for the way OR/MS principles permeate efforts to understand how products compete and can best be supplied in local markets around the world.

The award was presented by Glen Schmidt, Committee Chair and Michael Rothkopf, 2004 INFORMS President in October 2004.