Procter & Gamble Redefines Shipper-Carrier Relationship
When Procter & Gamble Co., one of the nation’s largest consumer products manufacturers, and Wal-Mart Stores, the world’s biggest retail chain, decided to share sales information and work together to reduce distribution costs, many truckers who hauled goods for the two companies naturally wondered what would be in store for them.
“P&G could monitor Wal-Mart’s sales and inventory data, and then use that information to make its own production and shipping plans with a great deal more efficiency,” said Pritchett, who retired in 1989 and went on to author a best-selling book on change management titled “Stop Paddling, Start Rocking the Boat.”
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“We were simply two giant entities going our separate ways, oblivious to the excess costs created by this obsolete system,” said Lou Pritchett, a former P&G vice president who participated in discussions that led to a groundbreaking partnership between P&G and Wal-Mart in 1988.
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The open-ended, collaborative relationship between P&G and Wal-Mart did, in fact, have a major impact on P&G’s transportation suppliers. Based on the success of its relationship with Wal-Mart, the manufacturer changed the way it dealt with all of its carriers, improving efficiency, reducing wait times and cutting costs.
