University of Santo Tomas

College of Commerce and Business Administration

S.Y. 2018-2019

Procter and Gamble’s

Implementation of
Total Quality
Management
Prelims Group Project

Jason Chiu
TQM Professor

Marhys Angelica Atienza

Denise Joy Balan
Trisha Benosa
Karmi Mariscal
Joshua Pacio
Members
 Company History and Background
The Procter & Gamble Company (P&G) is one of the largest consumer goods corporation,
headquartered in down Cincinnati, Ohio. P&G operates in nearly 80 countries all over the world and
markets its countless brands in more than 160 countries. Accordingly, more than half of Procter and
Gamble’s revenues are gained outside of its home country, the United States. Committed to
maintain its status as the leader in its markets, P&G remains to be one of the most aggressive
marketers and is the largest advertiser in the world. Many innovations that are now common
practices in corporate America were first developed in this company, such as the extensive market
research, the brand-management system, and employee profit-sharing programs.

But before dominating the daily lives of almost every consumers, P&G took a long time to be the
wonder brand that it is today. It took a lot of creativity and innovation to be achieve its peak of
success. Here’s how the company transformed itself to a global giant.

1837 – It all started with two brothers-in-law from Cincinnati,

William Procter and James Gamble, who became business
partners because of the suggestion of their wives’ father.
William being a candle maker and James being a soap maker
decided to combine their crafts to form the Procter & Gamble
Company.

1883 – Procter and Gamble launched its first major brand and
product, the Ivory Soap.
Procter & Gamble branded its first major product — Ivory Soap.
The company on boarded an a mass marketing campaign to
promote this product after trademarking the word “ivory”. Ivory
Soap was featured in The Century Magazine, the most popular
magazine of its day. It also took out ads in smaller, local papers.

1930 – Few years later, P&G became an international corporation

when it bought Thomas Hedley & Company, a British company
and maker of a soap product called Fairy Soap. Fairy Soap
boasted its ability to float, just like the Ivory Soap.
.
1946 – Shortly after the WWII, Procter and Gamble
revolutionized laundry through its new product, Tide. It
transformed the households by making the laundry easier and
faster, earning its nickname, “the washday miracle”. By the late
'40s, detergent replaced soap as the preferred way to clean
clothes. Tide became the number one brand. Early Tide ads,
which had a $21 million dollar budget, used bright colors and
images of happy housewives to attract consumers.

1955 – P&G, after five years of research and development,

introduced their toothpaste, Crest, which quickly went to the top.
This new product claimed to help fight cavities better than any
other brand. In 1960, the American Dental Association endorsed
the brand and by the end of the next year, Crest replaced
Colgate as the number one brand. This milestone solidified
P&G's place in the toiletries industry.

1956 - P&G hit its $1 billion sales mark – its first major sales
milestone.

1961 – Procter and Gamble started making disposable diapers

by introducing Pampers to households everywhere. This
innovation was born through the minds of a P&G engineer
Victor Mills after his grandson was born.

1950s & '60s - P&G invaded kitchens everywhere with food and
beverage products. The company has kitchen products
eversince, but it was only during the mid-20th century when it
really took over kitchens with Jif peanut butter (1956) and
Folgers coffee (1963). Pringles, one of P&G's only remaining
food products, was introduced in 1968.
 1982 – In 1982, P&G acquired Norwich-Eaton
Pharmaceuticals, making Pepto Bismol and Chloraspetic as
additions to its rapidly growing family. After three years, the
company bought Richardson-Vicks, the makers of Vicks and
Nyquil, for $1.2 billion (its largest purchase yet), as well as
the brands Dramamine and Metamucil.
These purchases solidified P&G's spot in drug stores.

1988 – Procter and Gamble entered the beauty business

when it bought Noxell, the company behind Cover Girl and
Noxema, for $1.34 billion.
Then, in 1991, it scoops Max Factor and Betrix from Revlon.
Though P&G acquired Pantene hair products in the '85
Richardson-Vicks deal, it wasn't until the '90s that it became
a billion-dollar brand.

Today - Procter & Gamble currently owns 83 brands, 23 of

which raked in over $1 billion last year.
It even earned a top spot on Forbes' list of the world's most
admired companies, thanks to innovative products like the
Swiffer and marketing ingenuity like Old Spice Guy.

Products

The Procter & Gamble Company provides branded consumer packaged goods to buyers all over
the world. They operate in five segments which are Beauty; Grooming; Health Care; Fabric &
Home Care, and Baby, Feminine & Family Care. The company’s products are sold in 180
countries and are available through mass merchandisers, grocery stores, membership club stores,
drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce,
high-frequency stores and pharmacies.

In the Beauty segment, PnG offers Skin and Personal products under the brands of Olay, Old
Spice, Safeguard and SK-II, which is a Japanese cosmetics brand. The Company also sells
conditioner, shampoo, styling aids and treatments under the brands of Head & Shoulders,
Pantene and Rejoice, which are well-known brands in the Philippines.
PnG also sells Shave Care products in the Grooming segment of the company. They offer female
blades and razors, male blades and razors, post-shave products and other shave care appliances.
Braun, Fusion, Gillette, Mach3, Prestobarba and Venus are their brands for this segment.

For their Health care segment, Procter & Gamble has oral care and personal health care
products. They offer toothbrushes, toothpaste, gastrointestinal, rapid diagnostics, respiratory,
vitamins/minerals/supplements. Examples of brands under this segment are Crest, Oral-B,
Prilosec and Vicks.

The company provides a range of fabric care products for their Fabric and Home Care segment,
which includes laundry detergents, additives and fabric enhancers, and are sold under the brands
of Ariel, Downy, Gain and Tide. While the home care products include dishwashing liquids and
detergents, surface cleaners and air fresheners, and are offered under the brands of Cascade,
Dawn, Febreze, Mr. Clean and Swiffer.

Lastly, the company’s Baby, Feminine & Family Care segment consists of Baby Care products like
baby wipes, diapers and pants, and are under the brands of Luvs and Pampers. They also provide
Feminine Care products, such as adult incontinence and feminine care products which are under
the brands of Always and Tampax. Family Care products, such as paper towels, tissues and toilet
paper are also available under the brands of Bounty and Charmin.

ISO Awards
ISO 9001:2015 certification
ISO 14001 certification by 2003
Pampers conducted LCAs that were compliant with ISO 14040/14044

Company’s Application of Total Quality Management

For more than 60 years, Procter & Gamble has been committed to their promise of superior quality.
P&G committed to incorporating sustainability issues into its strategy, especially regarding product
policies and product life cycles, as well as management practices such as supply chain
management and manufacturing policies. Since P&G is in the business of mass consumer goods,
its sustainability efforts basically would start with the products and the ingredients. For an instance,
in 2008, P&G started to work on suitable substitutes for phosphates in its Cascade dishwashing
products after certain states such as Virginia and Maryland, banned the use of specific chemicals in
the product because of the damage they caused when released into rivers and streams. However,
P&G maintained that its use of phosphates was not harmful (Warner, 2008).Also in 2008, P&G’s
products, such as Herbal Essences shampoo and Olay Complete Body Wash, contained high levels
of 1,4-dioxin, a chemical characterized as a probable human 8 carcinogen and banned from
personal care products in the European Union. Ensuring product safety is fundamental to doing
business for P&G, and historically the company would not put a product on the market unless it was
absolutely convinced of the product’s safety. However, the company has acknowledged that some
consumers have concerns over certain ingredients and would prefer products that do not contain
such substances. Therefore,for them to meet consumer concerns better, the company decided to
eliminate certain ingredients, such as 1,4-dioxin.
The next step of the P&G value chain is production, and one of the main challenge at this stage is
the use of energy. P&G will only achieve its principles of improving the lives of consumers and
preserving the environment if it is successful in reducing its environmental footprint during
manufacturing, which actually means a more efficient use of energy. Consequently, one of the
company’s major focuses is to rely more on renewable energy. Since 2010, P&G has implemented
or started many projects to improve its energy use, such as upgrading the existing onsite biomass in
North America to a large-scale combined heat and power operation and five onsite solar
photovoltaic projects across multiple regions that power several sites in Europe with 100%
renewable electricity from wind and hydropower. The wind farm project near Muenster, in Cooke
County, Texas (US), which will be built in partnership with EDF Renewable Energy, constitutes one
of the most significant energy projects. Indeed, the wind farm will produce enough electricity to
power all P&G’s North American fabric and home care plants in Ohio, Missouri, Louisiana, Kansas
and Canada, where brands such as Tide, Gain, Downy, Dawn, Cascade, Febreze and Mr. Clean
are produced. The power generated from the partnership will eliminate more than 200,000 metric
tonnes of carbon dioxide (CO2) emissions annually. Another objective achieved was reducing CO2
emissions. The company moved from boxes to bags for packaging, which saved 162 tonnes of CO2
by reducing the number of trucks for transportation of this product to vendors.

Next important issue for P&G is having safe and healthy operations around the world. Their
main goal is to protect the lives and health of both employees and the communities surrounding its
operations. In order to achieve this goal, P&G follows uniform corporate safety standards around
the world, constructs facilities in a way that does not compromise the safety and health features and
monitors progress towards preventing injuries, illnesses and accidents. P&G ensures that this
health, safety and environment program at all manufacturing facilities meets the intent of the global
health and safety management standards (OSHAS 18001 and ISO 14001). The next step in P&G’s
value chain is waste management and disposal policies. The question that the company always
consider is similar to all fast-moving consumer goods producers, what is happening with the
products once the consumers have used them? Since 2012, P&G augmented the use of recycled
raw materials by 39% and reduced generated waste by 8%. P&G’s brand Tide is a relevant
example. The company began producing new Tide bottles from old bottles approximately 20 years
ago and helped popularise recycling in North America. Since 2008, Tide products have been
produced with 40% less water and 40% less plastic per dose. All other waste materials were left to
the finished products or have been recycled, reused, repurposed or converted into energy. As of
today, P&G has at least 50% of all its manufacturing facilities operating with zero manufacturing
waste. The company is proud that their QA professionals are indispensible business partners
dedicated to driving the integrity of their products end-to-end; assuring an exceptional consumer
experience at the store shelf and in use.

We have successfully completed our ISO 9001:2015 certification!--- FROM LINKEDIN

ISO 50001 Certificate Holder: Procter & Gamble Manufacturing GmbH Test Mark Number:
9108615660

Comment: According to the company, Procter & Gamble's EMS has been subject to an independent
external review. The reviewer (ERM) has verified that P&G's system meets the intent of both ISO
14001 and EMAS standards. At this time, however, Procter & Gamble believes that going beyond
this to formal certification of the management system, including verification of site statements, does
not add value to the existing system. According to the company's subsidiary Gillette, more than two
thirds of its 34 production sites worldwide had obtained ISO 14001 certification by 2003.

*Pampers conducted LCAs that were compliant with ISO 14040/14044