How Amway Use The Operation Management To Compete?

2862 words - 12 pages

Jantarika Naktawan

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 ...view middle of the document...

Amway uses different ways to communicate with its various groups of stakeholders.

A company may have shareholders who can be internal or external stakeholders. As a private company, the families who own Amway are its sole shareholders. It is important that Amway communicates regularly with its stakeholders. They can affect or be affected by the business.
Amway uses different ways to communicate with its various groups of stakeholders; such as
1.) Websites, emails and voice mail updates promote products and services to ABOs and customers and keep them up-to-date
2.) Industry and trade memberships enable Amway to share and receive industry information
3.) Publications target key sales messages, for example, its monthly newsletter for ABOs, Amway Focus
4.) Events and exhibitions help Amway to communicate to ABOs, consumers and guests about running an Amway business and the products it can provide

Amway is selling directly to consumers without going through traditional retail outlets or 'high street'.
The supply chain

A supply chain links the finished products to end consumers. Amway has its own distinct supply chain, placing a strong emphasis on its ABOs. They are able to focus on individual customers and their needs.
This supply chain is different from a more conventional supply chain that sells goods to final consumers through retail outlets. Amway's way of working depends on building lasting connections with the end consumer. Feedback provided by consumers and ABOs helps to shape future changes in products and the service provided.
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...

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