Case: Elizabeth Arden Guideline Questions

1. Analyze the differences between the current supply chain and the proposed turnkey
strategy. What will the change mean for suppliers and their roles? What will it mean
for current employees and their roles?

The difference between current supply chain and the proposed turnkey strategy The current
supply chain was performing sub-optimally compared to both the industry benchmarks and
internal aspirations. Its processes and infrastructure were determined to be manually intensive
and inefficiency while the proposed turnkey strategy would have a radicle consolidation of
suppliers, major lead time reductions and far reaching impacts on product development. The
proposed turnkey strategy would improve the production planning and sales forecasting
strategy which initially had been tedious and focused on the short term without extensive use
of strategic account management and market intelligence. The proposed strategy pirard would
use a more accurate forecast. In this new approach, the turnkey strategy, Elizabeth Arden
would seek to consolidate the suppliers and the suppliers that remained would be given
additional responsibilities for undertaking the entire manufacturing process from materials
procurement to product completion thus simplifying procurement efforts. On the other hand,
the initial supply chain, individual purchase orders were made to many independent suppliers.
Elizabeth Arden hoped to become more flexible and have lower risk with a diversified
independent supplier base. Earlier the organisation was busy with orchastrating thentire
process, coordinate with different suppliers and get it to third party and the deliver, Now, they
want the manufacture to do the work end to end.

The change in statergy will bring in a disructive chnage for both the supplier and the cuurrent
employees. They way each of them were working will be significantly impcated and
changed.

The supplier will have to bring in orgnsational or functional changes to get in line with EA’s
requirements. They will have to accomodate additional responsibilities - procurement of
mateials to product completion. The orgnsation will have to work on
1. their tie ups with vendors
2. will need a manegiral & statergy team to create the work flow
3. might need to set up the equipements for all the process of manufacturing
4. will have to re work on the complete pricing and efforts
5. will have to hire more experienced professionals or train the existing employess or
hire freshers
6. will have to manage their own supply chain more diligently
7. Quality Assesment team

Current Employees
manual and labour-intensive purchasing process—buyers spent most of their time on
purchase order generation and expediting for both the individual components and finished
goods, leaving limited time for strategic sourcing and value analysis. There was also no
centralized management to perform strategic purchasing, resulting in a high direct material
spend and an inability to consolidate spend across brands/commodities and utilize volume
leverage to negotiate better pricing with supplier
The role can drstically change to a stratergy role. It can be difficult for the team to transition
and cop up with the change.
They might need to work towards simplifying material flows and collaborations with key
accounts; utilizing strategic sourcing; and developing more cross-functional ability.
Analysing the product type that needs to be selected for the re engineering process, which
needs to be prioritiesed.
Coordination work with suppliers can reduce but due diligence might increase. Quality
inspections might increase with each vendor.

Employess can be let go, it can impact the morale of others as well. but measures needs to be
taken to reduce time and cost.