P&G, once known as the preeminent household products supply chain company, is under attack. On February 15, 2017 Trian Partners, led by Nelson Peltz, purchased over a $3 billion stake in P&G qualifying him for a seat on the board. In prior years Trian Fund Management LP drove shareholder activism at PepsiCo and DuPont. The investment in P&G is their largest shareholder investment to date.
After two years of declining operating margins, Household Products Companies rebound in margin in 2016. With the reporting of full year results, the industry trend is clear. The margin improvement is due to a rise in price, and focused cost-cutting programs on labor productivity and sourcing. Note the patterns in the Clorox, Kimberly-Clark, and P&G results. P&G is making the greatest improvement in inventory turns while Colgate enjoys the highest margins.
Supply Chains to Admire results for Household Products for the Period of 2009-2015. Each year, Supply Chain Insights analyzes companies by peer group to understand which companies are driving the highest levels of performance while also driving improvement. The winner for two consecutive years is Clorox.