Operations Management

Q1) 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?

There are several differences between the current supply chain process of Elizabeth Arden and the proposed turnkey strategy. One of them is the inclusiveness of the suppliers within the company’s whole supply chain management. According to the current supply chain process in Elizabeth Arden, it has used independent suppliers due to cost-reduction matters. However, this has led the company to go through relatively weak relationship with their suppliers which can make them hard to gain several advantages by having long term relationship with their suppliers. Under this relationship, it also makes suppliers hard to get owner spirit with the company’s product which is crucial factor for adding value in supply chain. On the other hand, turnkey strategy suggest the company to give suppliers more responsibilities in the whole production process so that they can possess the ownership with the company’s product and save the integration cost which incur when the company tries to match all different materials from each of different supplier to produce one single product.

Also, when it comes to the order process for raw materials from its suppliers, the company currently has no centralized management toward purchasing issues. So each unit in the organization made its own prediction which used to lead the company to conduct overestimate or underestimate with their inventory issues and face difficulty in controlling their budget which can badly impact their capabilities and competency. Also, this problem caused long lead time for their production flow at the same time. However, turnkey strategy is expected to help the company in a way to simplify their procurement effort. By consolidating the suppliers, independent suppliers can work closely with each other while the...