Avon Supply Chain Model

2348 WordsApr 4, 201310 Pages
Supply Chain Restructuring: Analysis of Avon’s success story Presented by Ajay P Appukuttan (3966744) Musaffar Ali Hajour Table of Contents Introduction3 Summary of Findings4 Background Information7 Critical Issues8 Detailed Recommendations9 Implementation & Evaluation10 Conclusion11 References12 INTRODUCTION The success story of Avon, the company for women and world’s leading direct seller for beauty products starts with a decentralized operation in 6 countries in 1980s to a centralized operation hub that serves 145 countries through 5.8 million independent Sales representatives which makes the company provide same quality product worldwide. The core of this success lies in the brave transformation that Avon attempted to bring…show more content…
As a result, Avon will be on track to achieve its targeted annual savings of $200 million by 2012-’13 whereby the total implementation costs are expected in range of $300-$400 million. The main highlights or expected outcomes of the transformation that Avon expects are: * A net approximate reduction of 1200 positions globally when the process is completed, by 2012-13. * Commercial marketing operations in Spain and U.K integrated to become a single organization consolidated, to serve the Western Europe, North Africa and Middle East markets. * Suppliers bound to comply with Avon’s legal and ethical standards, including the new Avon’s Global Supplier Code of Conduct. * Reduce risk and protect the assets throughout Supply Chain. Critical Issues 1. The fundamental issue Avon faced was its mismatch between the selling cycle and supply chain cycle. As every third week saw a new sales campaign for Avon in Europe markets, they had a very short selling cycle which demanded a very flexible, responsive supply chain cycle. But supply chain took average 12 weeks from the sourcing point to the make the products reach branches, which was far long for short selling cycle product. 2. Each sales campaign registered enormous number of inefficiencies as the products could not be provided at the right time and right place. The workforce had to deliver more to make each event happen. 3. Meeting the demand posed by different markets and regions

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