2021–2022
• Manufacturing
• Digital Automation & Manufacturing Productivity:
+0.40% gross margin ($320.75M)
P&G ramped up factory digitization and robotics but inflation offset gains; productivity still contributed savings via leanerlabor and lower scrap.
• Product & Formula Optimization:
+0.75% gross margin ($601.40M)
Re-engineering formulas using AI enabled lower-cost materials without impacting performance, trimming material spend significantly.
• Distribution, Warehousing, Transportation
• Supply Chain 3.0 – Logistics Digitization:
+0.60% gross margin ($481.12M)
Initiatives like real-time routing and truck fill optimization reduced freight inefficiencies and warehousing waste.
• Network Sourcing & Optimization:
+0.50% gross margin ($400.94M)
Shift to regional sourcing slashed import duties and transport miles, softening exposure to 2022’s freight surge.
• SG&A
• Media Spend Optimization:
+1.20% gross margin ($962.24M)
First-party data and precision targeting cut wasteful ad spend and agency overhead.
• Overhead & Administrative Efficiency:
+1.10% gross margin ($882.06M)
Centralized functions, automated reporting, and remote ops held SG&A flat despite wage pressures.
• Indirect Labor
• Organizational Restructuring, Automation & Controls:
$2,080M total savings
Restructuring ($800M) and automation ($1B) were key drivers; reduced headcount and streamlined functions supported leaner back-office ops.
2022–2023
• Manufacturing
• Digital Automation & Manufacturing Productivity:
+2.00% gross margin ($1,640.12M)
Full-scale automation rollouts improved unit economics and throughput, with minimized downtime and scrap.
• Product & Formula Optimization:
+1.75% gross margin ($1,435.11M)
Reformulations avoided volatile inputs like resins and surfactants, achieving big wins during peak inflation.
• Distribution, Warehousing, Transportation
• Supply Chain 3.0 – Logistics Digitization:
+0.75% gross margin ($615.05M)
Scaling digitized freight networks and automated warehousing offset high logistics costs.
• Network Sourcing & Optimization:
+0.75% gross margin ($615.05M)
More production was relocated closer to consumption hubs, reducing storage and last-mile delivery spend.
• SG&A
• Media Spend Optimization:
+0.75% gross margin ($615.05M)
Marketing ROI increased via programmatic buying and fewer redundant impressions.
• Overhead & Administrative Efficiency:
+0.70% gross margin ($574.04M)
Streamlining support functions offset salary pressures and rising benefit costs.
• Indirect Labor
• Manufacturing/Back-Office Automation & Digitization:
$550M total savings
With restructuring mostly complete, gains came from leaner digital operations and reduced discretionary spend.
2023-2024
• Manufacturing
• Digital Automation & Manufacturing Productivity:
+2.20% gross margin ($1,848.86M)
Advanced analytics and robotics drove record factory productivity, fueling strong gross margin recovery.
• Product & Formula Optimization:
+2.00% gross margin ($1,680.78M)
Real-time cost-based formulation swaps enabled more flexible and cheaper ingredient choices.
• Distribution, Warehousing, Transportation
• Supply Chain 3.0 – Logistics Digitization:
+1.75% gross margin ($1,470.86M)
End-to-end visibility and digitized routing locked in permanent distribution savings.
• Network Sourcing & Optimization:
+1.50% gross margin ($1,260.59M)
Sourcing proximity and distribution rationalization lowered transit costs and inventory needs.
• SG&A
• Media Spend Optimization:
+0.60% gross margin ($504.23M)
Maintained reach with stable spend levels—reinvestment into high-ROI channels continued.
• Overhead & Administrative Efficiency:
+0.65% gross margin ($546.25M)
Reorgs, shared services expansion, and tight spend controls contained non-critical overhead growth.
• Indirect Labor
• Headcount Optimization & Automation:
$1,150M total savings
Workforce reductions and digitization freed up SG&A capacity; savings will compound through 2025.
