Global Supply Chain Re-Engineering 1

Global Supply Chain Re-Engineering

Ebonie Hope

Capella University

MBA 6123 Winter Quarter 2017

Global Supply Chain Re-Engineering 2

Global Supply Chain Re-Engineering

Business process reengineering involves the radical redesign of core business processes

to achieve dramatic improvements in productivity, cycle times and quality. Companies reduce

organizational layers and eliminate unproductive activities in two key areas: technology and

functional teams ("Management Tools - Business Process Reengineering", 2015). In mind-2008

Pierre Pirard was at the helm of reengineering Elizabeth Arden in a significant way.

1. Describe the differences between the current supply chain and the proposed turnkey

strategy.

The turnkey strategy is where the buyer is purchasing a complete product and not the buying the

components to build or manufacture a complete product. The current supply chain is focused on

the manufacturing the product based on the customers specifications or the idea that the product

will be completed by the buyer. In the United States Elizabeth Arden has distribution of more

than 300 brands and they ship directly to retail locations such as CVS, Walmart, Target and big

department store chains. Emphasis was placed on distribution overseas with global shipments for

large distributors like Sephora.

a. What will the change mean for suppliers and their roles? What will it mean for

current employees and their roles?

With this change, the suppliers can expect to see there will be different roles combined or

even eliminated. Inventory management processes may change and that could lead to product

changes. Changing the fundamental structure will also affect the current employees. Not only

will current employees have to keep up with the changes but get ready for organizational
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changes. According to the case study, Elizabeth Arden’s design was functionally organized

through hand-offs with a more customer centric approach. With the new approach, I can imagine

there had to be a very robust change management strategy put into place.

2. Calculate the total financial impact for the re-engineering effort. What does this

mean for Elizabeth Arden and its shareholders?

The new strategy made the shareholders want to spend more towards the new initiative.

The cost relating to the company’s reengineering was $600k of capital. This included a redesign

of order processing and accounting systems. For 12 months ending 30th June 2011, Elizabeth

Arden’s net income excludes $6.5 million U.S Dollars, regarding costs of debt extinguishment.

3. Assume the role of Pierre Pirard; what would you do and why?

If I were in the role of Pirard, I would make sure that first and foremost that the current

employees had an understanding of the upcoming changes and make sure that they are loyal. If

your employees trust the leadership they will work and be more welcoming in the coming

months of the change. Also I would ensure that they had all of the tools they need to sustain the

work that they have and push through any projected volume increases.
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References

Management Tools - Business Process Reengineering. (2015). Bain.com. Retrieved 2 April 2017,

from http://www.bain.com/publications/articles/management-tools-business-process-

reengineering.aspx

Wood, D., & Gao, N. (2013). Elizabeth Arden: Executing global supply chain re-engineering.

Ivey Business School at Western University. London, Canada: Ivey Publishing.