P&G to recast ops to get more agile, speed up growth

Procter & Gamble (P&G), the world’s largest consumer goods maker, has engaged management consultancy firm McKinsey & Co for a massive reorganisation of its businesses to help it become more agile and accelerate growth, said people aware of the matter. India will be among the first pilot markets for this plan, they said.

P&G’s operations in India are currently organised into four entities – P&G Health, Gillette (specialising in shaving products), P&G Health & Hygiene and P&G Home Products.

The company may evaluate the possibility of having a more simplified operating structure that integrates portfolios and combines the heft of the supply chain with a leaner cost structure. This was internally announced on Thursday last week.

P&G global CEO Joe Moeller has been seeking to transform the company’s organisational structure to follow an “integrated growth strategy”. The reorganisation will help simplify day-to-day decision-making, but constructive disruption, a theme playing out globally, will be a priority, said executives.

The restructuring exercise will involve assessing technology to make operations, especially the supply chain and technology, more efficient. For instance, the company could look at democratising data and allow its access across functions and organisations instead of just relevant teams and departments. “Learning and exploring ways to deliver better outcomes is something we do every day at P&G. This effort is no different. We are squarely focused on accelerating growth and value creation in service to consumers, customers, employees, society and shareholders,” said a P&G spokesperson.

The producer of popular brands such as Whisper, Vicks, Gillette, Oral-B, Tide and Pantene has lately been intensifying its commitment. This approach includes maintaining a robust brand portfolio and ensuring excellence, productivity and positive disruption throughout the value chain. Globally, P&G cut its participation to 10 product categories from 16 and reduced the number of brands to 65 from 170.In 2022-23, the Cincinnati, US-based consumer goods maker nearly touched the $2-billion sales mark in India, more than three decades after it entered the country. The idea is to explore how technology and people can help deliver growth and reach the next billion marks sooner, which is the mandate for both the parent firm and its Indian business, said two executives privy to the development.

In India, P&G competes mostly with Unilever’s local unit Hindustan Unilever (HUL), which is nearly four times its size. The company controls more than half the market for sanitary napkins and shaving razors and has consistently gained shares in these segments despite being the market leader. It reported sales of ₹16,089 crore and net profit of ₹1,682 crore across four Indian companies.

P&G has invested about ₹20,000 crore over the past two decades in the country, which is already among its top ten markets globally. McKinsey has been engaged for its global operations and will work on driving synergies and growth paths across countries.