Procter & Gamble Essay

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Recently, Procter & Gamble has made a number of important decisions regarding how they handle procurement and purchasing for different raw materials and components. One very important decision that has radically changed the P&G organization is their implementation of a Supplier Environmental Sustainability Scorecard in mid 2010. (Greenconomist) This Sustainability Scorecard was a precursor to a larger sustainability initiative in late 2010, and had the goal of encouraging suppliers to improve across the board. “The new scorecard, asks suppliers to report on a variety of measures, including energy consumption, greenhouse gas emissions, water usage, waste disposal, and adoption of P&G environmental initiatives.” (Greenconomist) Rotha Penn of P&G’s Global Sustainability Media Relations told Greenconomist that “Right now, [the scorecard] isn’t necessarily translating into purchasing decisions. That’s why there is flexibility. After one year, once the initial phase is completed, we will look at the results…Biggest thing is year over year improvement.” (Greenconomist)
Another move that Procter & Gamble has made concerning procurement methods is introducing a close relationship between the marketing and purchasing departments. The core reason for this decision is to improve the return on marketing and advertising dollars. There appear to be two major advantages to this arrangement. First, purchasing has designed a board-level relationship and developed a working relationship with marketing that has greatly enhanced the procurement department’s influence in the company. Secondly, this arrangement has produced a wave of influence throughout the company. Since marketing and purchasing do not have a traditional re...

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P&G. Heritage. 2011. 4 April 2011 .
Procter & Gamble. Operations & Suppliers. 2011. 7 April 2011 .
Rae, David. Procurement and marketing - an unlikely match? Not at P&G. 21 May 2009. 5 April 2011 .
Sustainable Sourcing. P&G targets sustainable future. 26 November 2009. 7 April 2011 .
The Institute of Commercial Management. Procter & Gamble to focus on environment. 29 October 2007. 10 April 2011 .

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