P&G: Recapturing an Innovation Edge

David Taylor speaking at Chief Executive’s 2016 CEO Talent Summit at Procter & Gamble headquarters in Cincinnati, Ohio.

When Procter & Gamble CEO David Taylor makes his annual visit this fall to one of the company’s product-supply technology centers, he’ll ask the assembled executives what innovations will help reach the company’s goal of cutting supply chain costs by $1 billion a year.

“Specifically, his question always is, ‘Which of these technologies is close-enough in that we should be accelerating them, and which are further out but should still be bet on?’” says Liz Fikes, leader of next-tech innovation at the company’s Corporate Engineering and Technology Labs.

She already knows part of what she and her colleagues will tout to the boss this time. The “close-in” showpieces will be ways P&G is using artificial intelligence and the Internet of Things to automate warehouses and distribution centers, and the further-out highlights will be the achievement of customized automation of deliveries so that as many as 7,000 different SKUs can flow seamlessly into a retail customer’s own supply chain.

Taylor loves the day he spends in the guts of P&G’s supply chain research, Fikes says, partly because he’s an engineer and plant manager by background. Jeff LeRoy, a Taylor spokesman, offers an additional reason: Technological imperatives and opportunities are “transforming the entire way we go to market,” he says.

As chief of P&G at a difficult and potentially decisive time for the company, Taylor has to get the transition right. That’s why he won’t miss his day at the tech center.

Innovation has been the lifeblood of P&G, arguably for its 180 years in existence, and most certainly, over the decade when A.G. Lafley was CEO, leading the hunt for outside innovations that the company’s brands could harness, such as Swiffer cleaners and Crest Spin toothbrushes.

But over the past several years, P&G lost its way behind questionable leadership, weighed down with too many brands, disfavored by cost-conscious consumers, and faced with determined competition. This time around, as Taylor continues to sift and winnow P&G’s brands and cost centers, the company is focusing as much on process technology as product technology to get to the future.

So far, the work of Fikes et al. has used sensors and IoT, for example, to create autonomous forklifts that also can be operated in a manual-override mode by humans. Her lab also has harnessed AR and VR glasses to develop efficiencies for researchers and line workers.

“We want the worker at the point of their work to know what they need to do and not have to walk back to a computer,” Fikes explains. “And right now, we can get that information to their mobile phone or iPad. But imagine the power of watching a video in your peripheral view of how to do a task, and freeing up a hand—and making sure it’s fully immersed in doing something with just the right amount of information being fed to you.”

In robotics, P&G is exploring how to fully automate its production line with robots to eliminate the roles of human “gofers” that still bring raw materials to the line and then take the finished products away.

Fikes’ teams also are testing the potential of using drones inside warehouses and factories to check on physical inventory levels, inspect cranes and check out anomalies in places that are inconvenient or even dangerous for humans to go.

“We aren’t using drones to carry things around yet, but they allow you to see and analyze things that otherwise would be hard to do,” Fikes says. “And their cost structure already has made them affordable.”

P&G is experimenting with 3-D printing with plastics and metals for making cosmetics masks that could be customized to an individual face and Crest Whitestrips that could be individualized for tooth shape and bite.

“We can get a design off a piece of paper or a screen and make something that we can immediately feel and test with consumers,” Fikes says. “And they want more personalized products.”

No doubt, Fikes’ team will have that figured out in the not-too-distant future.

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Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.

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