Avon Supply Chain Model

2357 words 10 pages
Supply Chain Restructuring: Analysis of Avon’s success story

Presented by
Ajay P Appukuttan (3966744)
Musaffar Ali

Table of Contents
Summary of Findings4
Background Information7
Critical Issues8
Detailed Recommendations9
Implementation & Evaluation10

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
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This helped in having less inventory in different warehouses instead the inventory is gathered in Poland and prepared when the sales trends were clearer for each market. This strategy also included a part of customizing the bottle shape in order to increases the containerization capacity of the products and thus, reducing the cost of transportation. Another point was related to the focusing more on a shorter lead time to get the spare parts rather than a cheaper unit price. Avon also invested in involving their suppliers more in the manufacturing process and giving them a better image of the order and production pattern to deliver properly and this using even their website avon.com. Consequently, Avon took advantage of an end to end view of the supply chain to develop different strategies to improve their supply chain and improve their productivity and be more cost efficient.

Strategic Application in the Supply Chain 1) Supply Chain Strategy- Responsive 2) Operational Strategies * Procurement Strategy: Efficient * Manufacturing Strategy: Make To Order, Flexible * Warehousing Strategy: Centralized/ Hub-Spoke * Distribution Strategy : Pull * Marketing Strategy: Multilevel Marketing, Independent Representatives * IT Strategy: Web- based collaboration.


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