How supply chain leadership drives business growth, competitive advantage

In the late 1980s and early 1990s, the idea that the supply chain could be a growth driver for a company was just in its infancy. Then, companies like Walmart, Amazon, Apple, and Zara, among others, started to realize that supply chain functions could be used to improve customer service and therefore improve customer retention and growth.

Walmart was among the first companies to implement cross-docking at scale—although the concept had been around for decades—giving it an advantage against competitors that were slower to respond. Apple has maintained tight control and relationships with its primary suppliers, allowing it to maintain greater control over its supply chain. Zara perfected the fast-fashion trend, enabling it to deliver items to stores within weeks versus the traditional six-month timeframe. And, of course, Amazon and its renowned logistics network helped it grow quickly into an e-commerce giant. But what do all these companies have in common? They all sought a way to turn a traditional cost center into a competitive advantage. They are not the only companies, of course, as many others have attempted to leverage their supply chains. Few have mastered it, though.

To understand how a company can leverage its supply chain to become a growth orchestrator, we interviewed a number of senior leaders inside P&G to learn how the consumer-packaged goods firm has turned its supply chain into a differentiator that allows it to fulfill its goal of on-shelf availability and drive growth. It is a story of seamlessly integrating goal setting, data tracking, automation, engaged management, and people empowerment. Simply put, it is One Supply Chain.

One Supply Chain

Luc Reynaert is chief product supply officer at P&G. Over his 37-year career, he’s seen firsthand that innovation in the supply chain is part of P&G’s way of operating. “What I can tell you is that in my time with P&G, I’ve always been involved one way or another in growing the company and making sure the growth elements were there,” he says.

In his previous roles as head of the supply chain for various P&G business units, Reynaert was responsible for helping bring new products to market, such as Febreze and Swiffer, and scaling their supply quickly to position them for significant category growth.  One of the keys to his success was that he never lost that appetite for growth. “Identifying how the supply chain can grow the business is in my DNA, and then when I got into supply chain for the Home Care division or for the Fabric Care division, it was all about accelerating market growth,” he explains. “How do we grow the category?  Then, you need to make sure that you supply it and do it at the proper cost and cash.”

“It is the importance of being on the shelf, online, wherever and whenever people want to shop. It also means producing quality products so that customers have a superior experience when they use our brands. We have a lot of effort there because if the quality isn’t good, our consumers won’t buy it.”

Leveraging the supply chain (P&G calls it Product Supply) to grow its business is not a new initiative at the company. It actually started to gain traction in the 1990s when P&G launched its first iteration of its current supply chain strategy. Historically viewed as a back-office necessity, today’s supply chain directly impacts revenue, customer satisfaction, and brand growth. P&G long ago recognized that and has been reinventing its supply chain with this mission in mind. It has gone through three iterations of its Supply strategy.

•  Supply 1.0. Focused on manufacturing excellence, zero machine losses, and 100% employee engagement.

•  Supply 2.0. Integrated the entire supply chain, from material suppliers to product distribution, to handle market volatility and demand surges.

• Supply 3.0. Extends the integration to retailers and consumers, making the system faster, more flexible, transparent, and cost-efficient.

As the strategy has evolved, it has remained consistent in its approach to satisfy the customer’s desire and need for the right product when and where it was needed. For beauty and personal care brands, that has meant winning consumers through superior innovation delivered at speed, and ensuring product availability. These efforts are directly tied to sales and market share growth. Supply chain leaders at P&G align operations with corporate strategy to meet evolving consumer demands, leveraging advanced logistics, strategic supplier partnerships, and real-time demand forecasting. That strategy is underpinned by four elements, Reynaert says.

1. Supply in full. Ensures product availability.
2. Seamless data, touchless flow. Integrates digital tools for efficiency.
3. Superior employee experience. Empowers employees with the skills and work environment they need to succeed.
4. Sustainability. Enables P&G’s efforts to reduce its environmental impact, help people reduce their impact while using P&G products, and scale industry-wide solutions that reduce environmental impact.

Reynaert says for P&G, the defining metric in 2025 is on-shelf availability.

“It is the importance of being on the shelf, online, wherever and whenever people want to shop,” he says. “It also means producing quality products so that customers have a superior experience when they use our brands. We have a lot of effort there because if the quality isn’t good, our consumers won’t buy it.”

To achieve that means the ability to innovate and pivot. It also means clear and consistent communication between division leaders, who disseminate the information through their teams. P&G has 10 different product divisions, each with its own president and supply chain leader. A key to Reynaert’s position is ensuring each division is aligned to the overall strategy, even if that alignment looks different due to the unique needs of each business.

“The key here is how do you create that?” he asks. “An organization where they run their own show but understand and can fully take advantage of our scale for co-developing solutions and advancing technologies. And then there is a commitment to help each other and make sure there is common ground for each of them to go and do that. A great example here is how we approach automation.”

When Reynaert took on his current role, each division had its own automation strategy. Since that time, those strategies have aligned, and each division is offered a menu of automation options they can choose from. Reynaert stresses that a unit still has the autonomy to craft its own strategies to fit unique needs, but the need for five different units to create the same solution five times is gone. “We implement and execute at a much faster pace and make the necessary interventions to accelerate progress, but I still respect the independence for each unit to run its own supply chain,” he says.

Leveraging data, AI, and automation

Technology is at the heart of P&G’s supply chain transformation. Through integration of real-time data with retailers and suppliers, P&G enhances visibility across its global operations. Artificial intelligence and machine learning help optimize inventory levels, ensuring products move efficiently from manufacturing sites to store shelves or e-commerce platforms and eventually the consumer.

In North America, P&G’s personal care planning team has automated more than 30% of manual supply chain processes, with a goal to reach 75% automation, says Jeffrey Chen, senior vice president-supply chain for P&G’s Global Skin, Personal Care and Beauty Sector. AI-driven quality control further improves efficiency by reducing defects and optimizing production schedules. This level of digital integration enables P&G to react swiftly to changes in demand, minimizing disruptions and maximizing availability.

Visibility is at the center of P&G’s skin care business, Chen notes. “We’ve worked very closely with our suppliers to drive the visibility of their systems from inventory to capacity, planning, and a quality standpoint,” he says, adding that working customer signals into forecasts and business planning has helped shorten lead times. P&G has incorporated customer signals directly into production and replenishment operations and even taken that a step further by shipping items to customers in their original packaging when appropriate, eliminating additional touches and package handling.

“We can ship the products from our warehouses near the production line direct to shoppers at the shortest possible lead time, giving them the best quality, and also the least packaging waste so it improves service, improves cost structure, and improves sustainability,” Chen explains.

Can Akcadag, who runs North American market distribution for the company, notes that having the data and the insight enables the distribution teams to ensure stores have the product when it is needed.

“Connected replenishment is really all about … working with retailers on the systems and settings to replenish in a way that our products are available whenever and wherever customers want to shop,” he says. “The second part of that is with integrated networks, what we do is look at the physical flow of our product through our joint collective networks to drive efficiency.”

Effectively doing this requires visibility throughout the supply chain, and P&G is mastering this by tracking products from warehouse to consumers’ shopping carts, improving its forecasting accuracy, inventory management and overall efficiency. With this information flowing seamlessly and automatically between business units, distribution, and customers, P&G can develop joint business and supply plans with retailers. Together with retailers, the company is “focusing on identifying the losses in our supply chains that are related to the flow of information or the flow of the physical goods,” Akcadag explains. “Then, [we] go after those losses and eliminate them in many cases through digitization and automation.”

That data flow, Akcadag notes, is critical to the ability of the P&G supply chain to drive business results. “Data is super important, and consumption data is especially critical,” he says, “but the more important part is how we use that data in our planning systems and work with retailers on actions that will maximize it. It’s amazing the amount of data we have today, not only for our supply chain, but for the retailers’ supply chain and our suppliers’ supply chain. The power is in how we use that data.”

That same data also allows P&G to maximize inventory flow—holding enough to ensure product can be shipped when needed but not too much that unnecessarily ties up cash. All that data is fed into the planning system and disseminated to production, leading to improved on-shelf availability. Most importantly, Akcadag says, is the ability to predict where availability challenges may arise so P&G and its retail partners can proactively address these before sales are lost. “Whenever we increase the availability levels, it becomes a win for the retailer and for us because it then grows our sales,” he notes.

Sustainability as a business and consumer priority

Sustainability has become an important part of customer loyalty in recent years. A 2023 McKinsey and NielsenIQ study found that products making sustainability-related claims average 28% cumulative growth over a five-year period versus a 20% growth over the same timeframe for products that made no such claims. Sustainability is not just about designing, sourcing, manufacturing, and disposing of products in a way that minimizes environmental impacts throughout their entire lifecycle; it is also about the way the entire supply and value chains handle that product. At P&G, that has meant working on ways to reduce the impact and making sustainability a core pillar of Supply 3.0.

“Data is super important, and consumption data is especially critical, but the more important part is how we use that data in our planning systems and work with retailers on actions that will maximize it. It’s amazing the amount of data we have today, not only for our supply chain, but for the retailers’ supply chain and our suppliers’ supply chain. The power is in how we use that data.”

“In our beauty business, sustainability is embedded in our Responsible Beauty strategy,” Chen says, pointing to the Olay Cleansing Melts product as an example. “This is the first in the industry where we have facial cleansing products in a fiber form so consumers can take a cleansing pad, then soak it in water, developing a rich soapy lather. Because they don’t contain liquid, Olay Melts are more sustainable and lighter to transport.”

Sustainability also extends to P&G’s transportation strategies. Akcadag explains that P&G has been able to use seven North American “mixing centers” that are strategically located to deliver product to approximately 85% of customers within 24 hours. Those mixing centers handle multiple product lines from multiple business units, enabling the transportation teams to develop transportation plans that take advantage of efficiencies.

“Our fabric care products, in general, are heavier products, while baby care products are light,” Akcadag says. “When we mix them, we enable the full utilization of the truck. Our mixing centers carry the whole portfolio. And for each of the businesses, based on the demand that they have for that region, we have clear inventory settings, and we expect the businesses to comply with those settings. That really enables us to have the products available there, enables mixing, and also enables us to deliver our products on-time, in-full to retailers at lower cost.”

Unified supply chain strategy: Cross-division collaboration

P&G’s scale gives it a unique competitive edge, allowing supply chain innovations to be applied across multiple product categories and deliver superiority. The company’s supply chain approach ensures best practices and technological advancements are shared across business units. That requires a commitment from management to create a successful framework and then empower division leaders to innovate solutions that work for their units, ultimately sharing those innovations across business units.

For example, Alberto Gomez, senior vice president of supply chain innovation, points to how its popular Tide Pods line leveraged the expertise of engineers in its diaper production. The Tide Pod is, in essence, liquid surrounded by fabric on each side. That is exactly what a diaper’s main job is—to capture liquid inside two pieces of fabric to keep babies dry. P&G used its expertise in producing diapers at high speed to perfect the Tide Pod production process.

The profitability of Procter & Gamble's product lines is enhanced thanks to the efforts of the supply chain, which continuously monitors product availability and costs, ensuring consumers have access to the items they want, when they want, at a price point that makes sense. (Photo: Procter & Gamble) 

That is just one example. Gomez says the goal is to use the scale of P&G to develop technologies and automation solutions that can be applied across business units. This approach is what brings Supply 3.0 to life, he says. The innovation team may work on technology such as automation in distribution centers, or it may be innovating more technical solutions such as the Tide Pods example. But its goal is to ensure that while each business unit may craft its own solutions, those solutions are vetted for possible use in other units. This includes things like automating quality checks so that 100% of products are inspected, Gomez says, noting that the use of vision systems, cameras and sensors are all utilized for this task.

The success of these initiatives is tied to the ability to communicate. “We have processes to continuously engage with our business units to understand the challenges, and we have engagements at multiple levels to problem-solve,” Gomez says. “In many cases, another business unit might have developed a solution, and we play the role of facilitating the reapplication of that solution, which sometimes they don’t have neither the time nor the ability to connect and reapply.”

Workforce transformation: The human side of supply chain innovation

P&G recognizes that technology is only as powerful as the workforce behind it. Reynaert, along with the others interviewed for this article, repeatedly stressed the importance of the third pillar of its supply chain strategy: superior employee experience.

“Our foundational strategy is superior employee experience,” Akcadag says. “We believe it all starts with our people, and we constantly work on creating a culture and environment where our people are empowered, energized, and they can bring, and we can bring, the best out of them and they can reach their best potential. We believe that without having that unique culture in place, nothing will work.”

Nearly two-thirds of P&G’s workforce is in the Product Supply function, so education and upskilling are an important part of the Supply 3.0 strategy. Doing so provides additional benefits, Chen says. “We want to expand our people from just doing the repetitive data sorting work into more advanced analytics and supply chain optimization work which is way more fun and also a bigger value and superiority that is sustainable and absolutely critical for our business,” he notes.

A 2021 Great Place to Work survey of 5,000 P&G employees found that 71% felt it was a great place to work and 81% said they were proud to work there. P&G also ranks highly on Glassdoor’s rating system and had an employee retention rate of 85% over a 12-month period of July 1, 2023, through June 30, 2024, according to company data.

Measuring success: Key metrics & business impact

Most supply chains are data heavy in 2025, and P&G is no different. While its main metric is on-shelf availability, it does track a number of different measures—all of which add up to direct impact on business outcomes. Each unit has some unique objectives, but regardless of the metric tracked, it is geared toward efficiency and the ultimate goal of turning the supply chain into a growth driver. Some of the key performance indicators P&G tracks include:

1. On-shelf & online availability. Tracks whether products are available at the right time and place for consumers.
2. Cost to serve. Measures efficiency in delivering products to customers while minimizing costs.
3. Supply in full & on-time, in-full (OTIF) metrics. Ensures that deliveries meet retailer expectations in quantity and timeliness.
4. Consumption data for demand planning. Tracks real-time sales and consumption data from retailers.
5. Transportation & logistics optimization. Vehicle fill rate and other logistics metrics.
6. Promotional event performance. Tracks incremental sales generated from promotions and adjusts inventory & replenishment based on demand surges.
7. Sustainability metrics. Packaging and logistics efficiency.
8. Employee & operational productivity. Annual company survey scores, attrition rates, and reduction in manual supply chain processes

The results speak for themselves. Despite economic uncertainties and market fluctuations, P&G’s supply chain strategy has helped to enable record business performance, reinforcing the company’s position as a leader in the consumer goods industry. P&G has seen its revenue grow from $71 billion in 2020 to over $84 billion in 2024.  All while continually reducing costs and identifying new sources of productivity to reinvest in growth.

Conclusion: Lessons for other companies

P&G’s approach to supply chain leadership offers valuable insights for companies looking to transform their operations, including the following.

• View supply chain as a revenue driver: Shift from a cost-cutting mindset to a growth-oriented strategy.
• Leverage AI and automation with purpose: Implement technology that increases efficiency and highest quality standards while delivering enhanced employee and consumer satisfaction.
• Integrate sustainability with business strategy: Align environmental ambitions with operational improvements.
• Empower supply chain leaders: Provide autonomy and decision-making power to supply chain executives to drive business success.

By prioritizing innovation, collaboration, and sustainability, P&G is a living example of how a well-executed supply chain strategy can be a powerful engine for business growth.

So how does this all tie together to enable the supply chain to be a growth accelerator for P&G? First, improving efficiency supercharges customer service, which leads to better on-shelf availability and ultimately, improves customer satisfaction. Akcadag sums up the process more succinctly, pointing to a recent retailer promotion.

“Recently, one of the retailers we work with ran a promotion. Because our supply chains are connected, we could immediately see the increase in consumption and provide a real-time signal back to our manufacturing system to produce more of those products, he explains. “As a result of that, the retailer reordered, and we were able to deliver all that product without any supply issues and that added … millions of dollars to our business during that promotion.”

That’s the business bottom line of the One Supply Chain.

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