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Strategic Supply Chain Management for Avon

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â?¢ Review "AVON profile: Calling on Customers Cost-Effectively" on pages 91-100. (Refer to this link http://lvk.cs.msu.su/~antiw/McGraw-Hill.Strategic.Supply.Chain.Management.The.Five.Disciplines.For.Top.Performance.ISBN0071432175.pdf)

â?¢ Describe the problems and risks Avon faced in the supply chain prior to their transformation, and respond to the following questions:
â?¢ What was Avon's greatest barrier to growth?
â?¢ What was the underlying cause of the barrier?
â?¢ Did Avon have a second-tier supplier in the event of a supply failure in the system?
â?¢ If not, how could that affect Avon's supply chain?
â?¢ Describe how Avon mitigated those risks and resolved those problems to develop a more effective and efficient global operations and supply chain process, and respond to the following question:
â?¢ How did Avon resolve the barriers related to growth?
â?¢ Assess the advantages of viewing a supply chain on an end-to-end basis, and respond to the following questions:
â?¢ How does the Avon case demonstrate the advantage of viewing a supply chain on an end-to-end basis?
â?¢ Is end-to-end another way of looking at the supply chain as system?

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Step 1

Avon faced a number of problems and risks related to its supply chain prior to its transformation. These problems included a very long supply chain cycle and a short selling cycle. There was a mismatch. There was also the problem of large unsold inventories, as production was carried out on the basis of forecasts. The production was unresponsive to changes in the demand in the market. Also, the cost of changeover from one production to another was very costly. Finally, language variants caused large stocks of preprinted containers to be wasted.

Step 2

The greatest barrier to Avon was its supply chain. The underlying cause of that barrier was that the supply chain had a mismatch between the supply chain cycle and the selling cycle. The selling cycle was only three weeks whereas the supply chain cycle was twelve weeks. This led to several problems, if a product was successful and more could be sold the company could not respond with additional stocks because it took another twelve weeks to order, make, and deliver fresh stocks to ...

Solution Summary

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Organizations are often plagued with the deterrent of unpredictability within the supply/demand chain. An organization's positioning in the marketplace will determine the level of comprehensive planning and level of inventory control management that is required for maintaining daily operations. For example, organizations within the electronics industry must be aware of the constant need to upgrade products and services to meet overwhelming consumer demands, yet remain knowledgeable of the organizations current inventory structure, i.e., product shelf life- cycle, as well as product replenishment cycles. Many organizations utilize JIT (Just-In-Time) as a means of eliminating excessive waste of unsold products and outdated materials. Another example is in the publishing industry, in which case authors and publishers opt to function as a P.O.D. (Print-on-Demand) provider. P.O.D. is a metOrganizations are often plagued with the deterrent of unpredictability within the supply/demand chain.

Organizations are often plagued with the deterrent of unpredictability within the supply/demand chain. An organization's positioning in the marketplace will determine the level of comprehensive planning and level of inventory control management that is required for maintaining daily operations. For example, organizations within the electronics industry must be aware of the constant need to upgrade products and services to meet overwhelming consumer demands, yet remain knowledgeable of the organizations current inventory structure, i.e., product shelf life- cycle, as well as product replenishment cycles. Many organizations utilize JIT (Just-In-Time) as a means of eliminating excessive waste of unsold products and outdated materials. Another example is in the publishing industry, in which case authors and publishers opt to function as a P.O.D. (Print-on-Demand) provider. P.O.D. is a metOrganizations are often plagued with the deterrent of unpredictability within the supply/demand chain.

An organization's positioning in the marketplace will determine the level of comprehensive planning and level of inventory control management that is required for maintaining daily operations. For example, organizations within the electronics industry must be aware of the constant need to upgrade products and services to meet overwhelming consumer demands, yet remain knowledgeable of the organizations current inventory structure, i.e., product shelf life- cycle, as well as product replenishment cycles. Many organizations utilize JIT (Just-In-Time) as a means of eliminating excessive waste of unsold products and outdated materials. Another example is in the publishing industry, in which case authors and publishers opt to function as a P.O.D. (Print-on-Demand) provider. P.O.D. is a method in which organizations reduce inventory while simultaneously meeting or exceeding consumer demand for publication resources. For instance, a writer will prepare a document for publication, and determine the method in which he/she would want to publish that document.

The author may have a couple of options that may include; working with a traditional publishing house, or self-publishing. If the author decides to self-publish, for example, his/her product will be available based on consumer demand instead of having excess products sitting on store shelves taking up space. P.O.D. eliminates unnecessary inventory and gives consumers the option of purchasing the author of choice found within the organizations online storefront. In most cases, P.O.D. contributed to the closures of several bookstores unable to compete in an e-commerce dominant marketplace. Most organizations lose profitability when unused inventory remains on the shelves; in essence, unused inventory is more of a liability to an organization considering the fact that an organization is obligated gets rid of unused inventory. Many organizations liquidate as a result of poor planning, mismanagement of control processes, or misappropriation of funds, or exceeding debt. Another example of organizations that exercise an alternative method of controlling inventory is AVON.

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