Avon Supply Chain Model
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 throughout its Supply Chain network by smaller supplier base, longer supplier partnerships, strategy of sourcing locally and supplier collaboration, which are going to save nearly $50 million annually. The company manufactures majority of its products in house, while nearly 15% of it happens at third party manufacturers (TPMs) situated at 39 countries across 5 continents. While beauty products which include cosmetics, toiletries and fragrances rounded upto 73% of its business, the balance attributed to jewelry, gift products, lingerie and fashion accessories.
Summary of Findings
SWOT analysis Avon:
Strength:
* Avon is one of the leading companies in the manufacturing of the beauty and home products around the world. * They are the largest organization who deals in direct selling. * Their manufacturing units around the globe are the strength for them. * This is one of the companies who banned the animal testing on their product line. * Wide range of products of the company captivates the interest of the consumer. * Avon doesn’t only deals in the beauty products but they also are the manufacturer of the non-beauty items like jewelries, watches and apparels.
Weaknesses:
* Avon
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 throughout its Supply Chain network by smaller supplier base, longer supplier partnerships, strategy of sourcing locally and supplier collaboration, which are going to save nearly $50 million annually. The company manufactures majority of its products in house, while nearly 15% of it happens at third party manufacturers (TPMs) situated at 39 countries across 5 continents. While beauty products which include cosmetics, toiletries and fragrances rounded upto 73% of its business, the balance attributed to jewelry, gift products, lingerie and fashion accessories.
Summary of Findings
SWOT analysis Avon:
Strength:
* Avon is one of the leading companies in the manufacturing of the beauty and home products around the world. * They are the largest organization who deals in direct selling. * Their manufacturing units around the globe are the strength for them. * This is one of the companies who banned the animal testing on their product line. * Wide range of products of the company captivates the interest of the consumer. * Avon doesn’t only deals in the beauty products but they also are the manufacturer of the non-beauty items like jewelries, watches and apparels.
Weaknesses:
* Avon
References: * Shoshanah Cohen & Joseph Roussel(2009), Strategic Supply Chain Management, Avon Profile: Calling on Customers Cost Effectively. * Supplier Code of Conduct, Available at:www.Avon.com * Corporate Responsibility Report, Available at: www.Avon.com