An Interview with Keith Harrison, Global Product Supply Officer for Procter & Gamble
Brand, especially in consumer products connotes value. It stands as a promise and should justify a price premium or at least a measure of shopper loyalty. Unlike the physical product, however, brand is essentially pure intellectual property. And while difficult to precisely value, this intellectual property is certainly worth protecting and extending wherever possible. Marketing may create brands and R&D may create formulas, but product supply instantiates them and, in so doing, can either fulfill and enhance brand value or mishandle and damage the brand.
How does a supply chain strategist think about brand IP? We asked the top supply chain executive at one of the world’s most respected brand owners about this topic: Keith Harrison, global product supply officer atProcter & Gamble, the $83 billion global consumer goods company.
Kevin O’Marah: What would you say is the most important job product supply has when it comes to fulfilling Procter & Gamble’s brand promise to consumers?
Keith Harrison: Well, there are several that vie for top billing, including the classic supply chain metrics of cost, quality, and availability. Maybe most important, though, is our ability to support innovation. Innovation is our lifeblood, and a supply chain that can’t handle the drumbeat of innovation would be a competitive disadvantage and a letdown to our consumers.
KOM: What most frequently makes doing that job difficult?
KH: External variables have been significant the past year, with material availability and commodity price increases and decreases making supply a challenge for almost every manufacturer. The pace and amount of innovation in P&G is relentless, so ensuring the supply network can contribute to and deliver against this innovation stream is another demanding dynamic of our role.
KOM: What downstream data does supply chain have access to that can influence brand development? How well do other functions (especially marketing) appreciate this demand data?
KH: Point-of-sale (POS) data, inventory, shelf availability data; these are all available broadly. Marketing certainly appreciates this data, but, in particular on the innovation front, real-time POS data from initially after launch allows us to validate assumptions about variants’ appeal to consumers. Collaboration with marketing allows us to understand and use all this downstream data, but the variant-split POS data is key for successful innovation.
KOM: How can supply chain influence the success or failure of brand extensions, promotions, or customer-specific initiatives?
KH: Close collaboration with the R&D folks on design of products and processes is what allows us to bring out tangible products. Our work on agility is giving us the ability to manage a huge innovation portfolio. At a minimum, we must avoid being on the critical path; ideally, we’re an enabler to innovation. The flexibility to be able to differentiate without dramatically increasing costs is important. If all you do is bolt on to the existing supply chain, you can’t succeed. You need to rethink supply chain design to anticipate needs down the road and build capabilities for the future. That is the idea behind our 2015 design project.
KOM: How important is the problem of brand artwork or labeling in executing supply chain strategies? How has this been affected by new information technologies?
KH: Critical. For many companies, artwork, label art, and packaging art are their key challenges partly because, historically, it has not been the most disciplined process. There are lots of touches from general management to brand management, to R&D, to legal, to product safety. This is an area that is ripe for mistakes. We’ve done a lot of work here and have had no major quality problems. Small issues arise with things like UPC codes, for instance, that can cause customer problems, but not consumer problems. We’re working toward a Right-First-Time principle measuring the percentage of times artwork makes it through the entire process with no changes. We have been dramatically improving this, but from a low base.
In terms of IT, some vision systems to match labels against intended artwork have been successful. We are also exploring digital printing to reduce lead times and changeover times. Normally artwork is on the critical path. The technology is clearly developing to help but only if it can be overlaid onto a disciplined process. Artwork is one of the most complex processes in our entire company; if you try to map the process you end up with flow charts covering all four walls.
KOM: Is counterfeiting or other third-party damage a problem? What can be done about it?
KH: If you do not have a counterfeiting problem, you probably don’t have a successful product. We work very closely with our retailers, distributors, internal security teams, and external enforcement agencies to rigorously defend and protect our intellectual property. Thanks to this work, the chances of our shoppers being confronted with a counterfeit product have been dramatically reduced.
KOM: Further up the supply chain, how do formulas, manufacturing technologies, or other patented IP contribute to brand value? How are these protected?
KH: I think this is the core of where supply chain working with product development adds great value. Process development technology is a key strategic advantage to the company. Simple things like the Cascade Action Pack, which was an internally-developed process technology, have been difficult for competitors to copy. In fact, so far they can’t. Or the example of Always Infinity in our feminine hygiene business: we have developed eight new-to-the-world technologies for materials manufacturing, which according to the experts at Los Alamos, are advanced. Only Procter can pull this off.
KOM: Are there any other important lessons you have learned about building, monetizing, or protecting IP in the global supply chain?
KH: One thing I’ve learned with our work on CDSN (Consumer-Driven Supply Networks) is that monetizing supply chain capability is impossible alone. Whether upstream with R&D on process development or downstream with the customer organization, it takes a team. Also, it takes a focus on capability development bringing specific nuts and bolts tools to the party with a long-term vision of where you’re headed. It’s also important to recognize that if you’re not moving forward, you’re moving backward. The constant dissatisfaction with the status quo is essential today.
KOM: Thank you for your time, Keith.
In the lead up to our spring Supply Chain Executive Conference, with the theme “Captains of the Content Economy,” we will be presenting a number of interviews and case studies with Supply Chain Top 25 leaders here and in our blog. We hope these lessons from the leaders will help you with your operational excellence efforts.
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