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Elizabeth Arden

Decent Essays

Assume the role of Pierre Pirard, I would execute the supply chain re-engineering for the value it could bring. The turnkey strategy would greatly improve Elizabeth Arden’s performance on supply chain efficiency and effectiveness. The plan should include supplier consolidation to reduce COGS as well as an improvement on working capital. It also requires a re-design of the organization structure.
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In 2007, material and indirect purchases of $350 million accounted for more than half of Elizabeth Arden’s COGS. The high cost was relevant to the nature of products, but more importantly, maintaining a good relationship with numerous manufactures of brands were costly. There are many independent suppliers available in the market, in addition, suppliers are critical components for product quality, performance, and price. Such commodities to critical products frameworks suggest a leverage preferred supplier strategy using supplier consolidation. Under the proposed turnkey strategy, the company provides preferred suppliers more responsibilities for the entire manufacturing process so a long-term relationship could be formed. To make it work as promised, suppliers should pay on-site visits to Elizabeth Arden for early involvement …show more content…

Labor-intensive purchasing process is an expensive and low value-added work. Currently, the company has no centralized management to perform strategic purchasing. It was a concern that whether employees would come up with speed to the dramatic changes coming from re-engineering. Some of multiple hand-offs between department look complicated and redundant. An example of solution would simplify the process from demand planning to raw material planning to be implemented by less employees within a close group. In addition, the organization should be re-designed to a more “customer oriented” to align with the turnkey

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