How Amway Use the Operation Management to Compete? Essay

Words: 2805
Pages: 12

Jantarika Naktawan

Introduction Amway is one of the world's largest direct sales companies. It is a global enterprise that started the company in 1959. Founded in Ada, Michigan by Rich DeVos and Jay Van Andel, the company continues to be privately owned by the DeVos and Van Andel families. Currently more than 3 million Amway salespeople on six continents sell more than 450 quality Amway products directly to consumers in over 80 countries and territories. Amway distributes a variety of products, including: 1 Personal Care - fragrances, body care and hair care products 2 Skin Care and Cosmetics 3 Durables - cookware and water treatment systems 4 Nutrition and
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Suppliers must produce quality goods that Amway ABOs can sell with confidence. The goods should offer value for money and provide guarantees that they will meet Amway standards. Suppliers may contribute to the design and appearance of Amway products. Amway breaks down processes and sets up strict criteria to stop costly and unnecessary changes in product characteristics. Amway Puts a Stop to Waste in the SKU (stock keeping unit) Revision Process. It wasn't just the 22,000-plus SKUs that Amway Corp. offers to its customers through direct sales. The real problem was the huge number of revisions that the company was making to those items. According to senior supply chain analyst Jerry M. Bronkema “suspected that not all of the SKU changes it was making were justified.” An investigation uncovered substantial waste in the process. He and his team found that Amway was processing an average of 23 SKU revisions per day, covering changes in raw ingredients, label, color and packaging. Each one took at least five hours to set up, including entry into the system, exchanging of e-mails, and re-pricing where necessary. To solve this problem the company launched a kaizen event: a limited-scale effort to address a specific business problem with an eye toward gaining control of SKU revisions. The kaizen event