Procter & Gamble CFO Andre Schulten said a shutdown of its transportation management service provider Blue Yonder in Q4 had a “relatively benign” impact on its operations, according to a Dec. 3 session at the Morgan Stanley Global Consumer and Retail Conference.
While Schulten didn’t specify the cause of the shutdown, Blue Yonder was the target of a ransomware attack in late November, and major companies, including Starbucks, experienced disruptions due to the outage. The Arizona-based supply chain management software provider was already near full recovery by the beginning of December.
When the disruption first occurred, Procter & Gamble’s backlog of orders would have been worth up to 70 basis points of the quarter, Schulten said on a Jan. 22 earnings call.
To address the building backlog, Procter & Gamble’s team set up a manual in-house solution within 12 hours that provided the “same basic functionality that Blue Yonder provides,” Schulten said at the Morgan Stanley conference.
“The manual operation is very time-intensive and cost-intensive,” he told analysts.
At the conference, Schulten said over the previous five to six days, Procter & Gamble was able to process shipments and orders and get trucks out. He added that the company was shipping roughly 100% of the orders it received.
On the January earnings call, the CFO told analysts the company’s team exceeded expectations. “They were able to not only work-through the full backlog and get us back on the operating system faster, they were also able to then process strong orders in late December.”
During the Dec. 3 conference, Schulten said the company might have missed some short-term shipments due to truck availability as there were less trucks for hire.
However, Schulten expressed optimism that the outage wouldn’t challenge Procter & Gamble’s fiscal year performance. The CFO said “we have time to catch up on the shipments, we have time to catch up on the cost implications.”
