Discuss supply and demand in the industry

Personal Products Industry manufactures products for personal hygiene and beauty. I am going to explore the supply and demand of these products. Specifically of Avon. This company modified its supply chain to meet in a more efficient way supply and demand. This was because Avon supply chain was not efficient. The Avon’s of the six countries in which they used to operate during the1980’s used to do it independently. The selling cycle and the supply chain did not use to match. The reason of this is that they used to have short-selling periods of three weeks. That means that every three weeks they used to introduce new products. So they were not able to satisfy demand efficiently because some products were not popular enough and some were extremely popular so they used to experiment shortages. Another problem that Avon had was that they bought from suppliers’ pre-printed containers in different languages for their products. Sometimes they were not able to satisfy the demand because remaining containers were in other languages instead of the needed one. Another difficulty that Avon used to present was that the company used to buy glass bottles in Mexico because it was inexpensive, but the down side was that transportation was slow and expensive. During the 1990’s when Avon expanded to new countries, they started to have a centralized business so this way they could be more efficient in their supply chain. The company transformed the supply chain consolidating production. Now they also produce their own containers in the language that they need. In this way they supply demand efficiently. Avon, also, no longer imports bottles from Mexico, buying more expensive ones in Europe close to their production plants but now the company has lower total costs. Now a days Avon products demands come from 145 different countries. Avon supplies them in an efficient way. Business in this industry should follow what Avon did modifying their supply chain to meet in a more efficient way supply and demand.

 

Source:

http://www.prtm.com/uploadedfiles/books/avon_gets_its_supply_chain_makeover.pdf