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Is PG's Supply Chain 3.0 Redefining Efficiency Through Automation?
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Key Takeaways
Procter & Gamble is modernizing its supply chain with AI and digital tools to improve efficiency.
PG's Supply Chain 3.0 aims to cut costs, enhance productivity and boost margins across operations.
Q2 fiscal 2026 margins fell year over year but were partially offset by gross productivity savings.
The Procter & Gamble Company (PG - Free Report) is focused on building a resilient and sustainable end-to-end supply chain, leveraging advanced analytics with AI-driven planning for demand forecasting and accelerating digitalization to enable real-time visibility across operations. This aims at improving planning precision, driving operational flexibility, lowering supply-chain disruptions and ensuring efficient execution across PG’s global manufacturing and distribution footprint.
PG’s Supply Chain 3.0 underscores its next-generation supply-chain model, integrating automation, advanced data analytics, digital tools and organizational redesign to boost productivity and cut costs across planning, manufacturing and logistics. This initiative is fundamentally a margin-enhancement one, with a structural transformation in how the company responds to demand and drives innovation across its operations per consumers’ evolving preferences.
In second-quarter fiscal 2026, although PG’s margins fell year over year, the decline was somewhat offset by gains from productivity savings. Gross margin benefited from gross productivity savings of 160 basis points (bps), whereas operating margin included productivity savings of 270 bps. Hence, Procter & Gamble is targeting cost savings, driven by globally scalable platform programs under Supply Chain 3.0, with improved marketing productivity, increased efficiency, lower excess frequency and expanded reach. It also has incremental savings opportunities via its three-year rolling productivity master plan and restructuring efforts.
Procter & Gamble is actively managing its portfolio across markets and brands to strengthen its daily-use categories, where performance drives brand choice, aided by restructuring actions. PG continues to emphasize supply-chain modernization, closer collaboration with retailers and the use of digital tools to optimize routing, sourcing and fill rates. The company is also streamlining overhead and enhancing marketing effectiveness, reinforcing disciplined execution across the organization. At its core, PG’s Supply Chain 3.0 is redefining efficiency through automation and digital transformation, creating a faster, leaner and more data-driven supply network.
PG’s Competition
Colgate-Palmolive Company (CL - Free Report) is focused on making its operations more connected, efficient and resilient by leveraging digital tools, data analytics, automation and enhanced supplier engagement. CL’s productivity program is also becoming a key driver of its margin strategy, as it navigates cost inflation and uneven category growth. Thus, Colgate has built flexibility into its business model and sourcing strategies, leveraging productivity initiatives to optimize supply chains, enhance digital capabilities and support growth investments. Colgate remains optimistic on supply-chain improvements and a robust pipeline of science-based innovation.
The Clorox Company (CLX - Free Report) has introduced a streamlined operating model created to simplify how it works, reduce costs and make the organization faster and more focused. At its core, the streamlined model removes unnecessary layers, consolidates roles and restructures teams to operate with greater clarity and accountability. The company is shifting away from a more fragmented structure toward a leaner organization where responsibilities are better defined and processes are standardized. Hence, flexibility in sourcing and business models helps navigate cost inflation, supporting long-term strategic priorities.
PG’s Price Performance, Valuation and Estimates
Procter & Gamble’s shares have lost 4.8% in the past six months compared with the industry’s 6.2% drop.
Image Source: Zacks Investment Research
From a valuation standpoint, PG trades at a forward price-to-earnings ratio of 20.87X compared with the industry’s average of 18.44X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PG’s fiscal 2026 and fiscal 2027 EPS reflects year-over-year growth of 2.2% and 4.5%, respectively. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has moved south in the past 30 days.
Image: Bigstock
Is PG's Supply Chain 3.0 Redefining Efficiency Through Automation?
Key Takeaways
The Procter & Gamble Company (PG - Free Report) is focused on building a resilient and sustainable end-to-end supply chain, leveraging advanced analytics with AI-driven planning for demand forecasting and accelerating digitalization to enable real-time visibility across operations. This aims at improving planning precision, driving operational flexibility, lowering supply-chain disruptions and ensuring efficient execution across PG’s global manufacturing and distribution footprint.
PG’s Supply Chain 3.0 underscores its next-generation supply-chain model, integrating automation, advanced data analytics, digital tools and organizational redesign to boost productivity and cut costs across planning, manufacturing and logistics. This initiative is fundamentally a margin-enhancement one, with a structural transformation in how the company responds to demand and drives innovation across its operations per consumers’ evolving preferences.
In second-quarter fiscal 2026, although PG’s margins fell year over year, the decline was somewhat offset by gains from productivity savings. Gross margin benefited from gross productivity savings of 160 basis points (bps), whereas operating margin included productivity savings of 270 bps. Hence, Procter & Gamble is targeting cost savings, driven by globally scalable platform programs under Supply Chain 3.0, with improved marketing productivity, increased efficiency, lower excess frequency and expanded reach. It also has incremental savings opportunities via its three-year rolling productivity master plan and restructuring efforts.
Procter & Gamble is actively managing its portfolio across markets and brands to strengthen its daily-use categories, where performance drives brand choice, aided by restructuring actions. PG continues to emphasize supply-chain modernization, closer collaboration with retailers and the use of digital tools to optimize routing, sourcing and fill rates. The company is also streamlining overhead and enhancing marketing effectiveness, reinforcing disciplined execution across the organization. At its core, PG’s Supply Chain 3.0 is redefining efficiency through automation and digital transformation, creating a faster, leaner and more data-driven supply network.
PG’s Competition
Colgate-Palmolive Company (CL - Free Report) is focused on making its operations more connected, efficient and resilient by leveraging digital tools, data analytics, automation and enhanced supplier engagement. CL’s productivity program is also becoming a key driver of its margin strategy, as it navigates cost inflation and uneven category growth. Thus, Colgate has built flexibility into its business model and sourcing strategies, leveraging productivity initiatives to optimize supply chains, enhance digital capabilities and support growth investments. Colgate remains optimistic on supply-chain improvements and a robust pipeline of science-based innovation.
The Clorox Company (CLX - Free Report) has introduced a streamlined operating model created to simplify how it works, reduce costs and make the organization faster and more focused. At its core, the streamlined model removes unnecessary layers, consolidates roles and restructures teams to operate with greater clarity and accountability. The company is shifting away from a more fragmented structure toward a leaner organization where responsibilities are better defined and processes are standardized. Hence, flexibility in sourcing and business models helps navigate cost inflation, supporting long-term strategic priorities.
PG’s Price Performance, Valuation and Estimates
Procter & Gamble’s shares have lost 4.8% in the past six months compared with the industry’s 6.2% drop.
Image Source: Zacks Investment Research
From a valuation standpoint, PG trades at a forward price-to-earnings ratio of 20.87X compared with the industry’s average of 18.44X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PG’s fiscal 2026 and fiscal 2027 EPS reflects year-over-year growth of 2.2% and 4.5%, respectively. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has moved south in the past 30 days.
Image Source: Zacks Investment Research
Procter & Gamble carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.