Elizabeth Arden Case 1) How would you assess Elizabeth Arden's current performance and how well are they positioned to compete in the fragrance and cosmetics industry? 2) Discuss the differences between the current supply chain and the proposed turnkey strategy, and also answer the following two questions What will the change mean for suppliers and their roles? What will it mean for current employees and their roles? 3) Consider Elizabeth Arden's global supply chain re-engineering effort: List the costs which will accompany this effort. What areas will positively impact financial performance and what are the drivers of those savings, e,g., How the COGS or Working Capital changes?

1) How would you assess Elizabeth Arden's current performance and how well are they
positioned to compete in the fragrance and cosmetics industry? 
Elizabeth Arden's performance is evaluated on the basis of their poor fill rates (85%), slow moving SKUs, and lengthy leads, all of which contribute to their high inventory levels. Additionally, they perform badly by industry standards and are not well-positioned to compete in the fragrance and cosmetics industries. Walmart was the only customer that contributed for more than 10% of their net sales in 2007, according to the case study. Walmart, as a major retailer, has the ability to negotiate prices, which eliminates any negotiation leverage Elizabeth Arden may have to offer at a premium price. Elizabeth Arden's completed products, on the other hand, are positioned as generic and replaceable. Additionally, their logistics and supply chain expenditures have increased as a percentage of net sales. The supply chain of the firm is inefficient, resulting in an excessive quantity of low-value-added work when they might be concentrating on their competitive advantages.
2) Discuss the differences between the current supply chain and the proposed turnkey
strategy, and also answer the following two questions
- According to the case study, Elizabeth's initial supply chain was complicated and expensive. Numerous purchases were made from numerous independent suppliers, who were required to assume responsibility for a significant percentage of the product completion process. After shipping the items to a third-party manufacturer, the corporation arranged for the final product to be delivered to either the distribution center or straight to the consumer.
By and large, their supply chain is laborious and inefficient. The suggested turkey strategy aims to streamline purchasing requests, consolidate suppliers, and assign greater accountability to suppliers for the full production process, from material procurement to product completion. This enables the organization to concentrate its efforts on its competitive advantage and value-added operations.
What will the change mean for suppliers and their roles?
- This change means more responsibility for the suppliers with them taking on the added responsibility for the entire manufacturing process from materials procurement to product completion. They are not only suppliers in this instance but also manufacturers.
What will it mean for current employees and their roles?
- This change will mean that employees will be more customer oriented, they will receive additional training in order to focus on the company's objectives and some may get laid off.
3) Consider Elizabeth Arden's global supply chain re-engineering effort:
List the costs which will accompany this effort.
- Purchase of software for automation licensing
- Hiring of consultants
- Training to use software
What areas will positively impact financial performance and what are the drivers of those savings, e,g., How the COGS or Working Capital changes?
- A decrease in COGS due to outsourcing efforts (save in labor cost)
- Automation can lead to reduction of COGS and possibly lead to additional revenue in the future
- Consolidating suppliers may lead to reduced purchasing and processing costs.
- Reduced freight and shipping costs will lead to reduced COGS