LINDO Helps Redesign Supply Chain

P & G Saves a Quarter of a Billion


When you make and globally market over 300 brands of consumer goods with operations in over 70 countries worldwide, efficient work processes are critical. If you want to remain a worldwide market leader in everything from diapers and acne products to antacids and denture creams, you cannot afford unnecessary duplication. Procter & Gamble knows this, and they know just the tools to use to streamline their supply chain.

P&G underwent a massive effort to reexamine and reengineeer their product sourcing and distribution system in their North American operations. The undertaking involved no less than 500 P&G employees working together over a period of several months. The methodology developed to solve the problem combined information technology, integer programming, network optimization, a geographical information system, and a copy of LINDO. The result was an overhaul of P&G's manufacturing and distribution system that is saving well over $250 million per year mostly from lower manufacturing expenses.

The paper, titled "Blending OR/MS, Judgement, and GIS: Restructuring P&G's Supply Chain" appeared in the January-February 1997 issue of INTERFACES, and was a Franz Edelman Award Finalist. The authors were Thomas Chorman, Franz Dill, and Glenn Wegryn of Procter & Gamble and Jeffrey Camm, James Evans, and Dennis Sweeney of the University of Cincinnati.

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