P&G began using SAP's Advanced Planner and Optimiser (APO) application at several of its plants in Europe earlier this year and plans to start installing the software in its North American facilities, said Stephen David, P&G's chief information officer and chief business-to-business officer.
APO gets updates from retailers on customer demand, which create "demand triggers" that forecast the right amount of product mix needed. The software also takes into account the delivery schedule of raw materials and production cycles.
David said that during the next three years P&G expects APO to help halve out-of-stock problems by ensuring that it has the right mix of goods available at distribution centres and on store shelves.
APO "is more of a reality" now than it was when the software was introduced three years ago, David said. "I think it's fair to say this is a new product for SAP, so they're working with us and other manufacturers to try to get it fully commercial and [have] the key functionality," he said.
Christian Knoll, vice-president for global supply chain initiatives at SAP, said SAP has 278 APO customers. He added that the latest version, 3.1, includes built-in processes tailored to specific vertical industries, including the consumer packaged goods sector.