To support the back-end delivery of products, Elizabeth Arden has partnered with third-party providers. Under Pirard, the company shifted from a tolling contract manufacturing engagement to a turn-key solution, choosing to outsource 95 percent of its contract manufacturing to a series of strategic partners. "We maintain control of key strategic input commodities where we have deep market expertise," Pirard says, "but all other purchasing and supply-chain management is handled by the contract manufacturer."
Elizabeth Arden also partners with third parties for the purchasing and management of all indirect categories, including secondary packaging, marketing, professional and corporate services, and information technology.
The combination of the front-end improvements through the S&OP program and back-end initiatives leveraging outsourcing engagements have benefited Elizabeth Arden from both a cost and cash flow perspective, as well as providing service-level improvements. Thanks to the S&OP program Elizabeth Arden, using inventory as a proxy, has decreased their holdings by 30 percent in the last two years. From a service-level perspective, the S&OP program has helped establish a database that tracks performance by SKU, region and account. This enables efficient analysis of performance and issue/bottleneck identification. In addition, Elizabeth Arden's fill rate has increased from the high 80's percent range to the mid-90's percent range. "Based on the momentum achieved so far, we have the ability to deliver best-in-class fill rate in the near future," Pirard says.
And, as a result of their various outsourcing programs, Elizabeth Arden is seeing significant and ongoing savings on the bottom-line. In secondary packaging, for example, the company is realizing more than 20 percent year-over-year savings. Another area in which Pirard and his team have made a significant improvement is air freight, where Elizabeth Arden has decreased by 50 percent its reliance on and spending on over the past year.
"We are focused on ensuring that all corporate cost reduction initiatives are fully resourced and that we are focused on driving improvements in the pure unit costs of goods and services, not just a few key wins around inventory management," sums up the 2011 Practitioner Pro of the Year.
2011 Next-generation Thought-leader for the Supply Chain — Shekar Natarajan
At the young age of 31, Shekar Natarajan has won accolades and the praise of industry and academicians alike for his innovation in applying scientific management methods to the supply chain with the development of a methodology for "systematic network planning." A frequent speaker and writer on supply chain topics, Natarajan also is the author of numerous articles in industry publications, as well as author or co-author on three books on supply chain topics.
Natarajan currently is working with other industry leaders, including Ron Hammond and Lee Hales, to develop a "supply chain maturity model" aimed at enabling companies to evolve and build roadmaps for the supply chain of the future. Natarajan says that the model is intended to be "the most complete pieces of work pertaining to supply chain maturity models."
At Pepsi, he was a key architect and leader of the company's direct store delivery (DSD) transformation program, which earned first place in the Supply Chain Innovation Award competition from the Council of Supply Chain Management Professionals in 2010. He led Pepsi DSD transformation, providing leadership from a visioning, strategy, system and process standpoint. In addition, Natarajan serves on the board of Colalife, a non-profit organization committed to improving children's health in developing countries by using innovative supply chain concepts to deliver medicine.
Supply and Demand Chain Executive has recently invited him to be a regular contributor of a monthly series, called "Forging a Dynamic, Energetic and Enduring Supply Chain — Hammond & Natarajan Series," to share his thinking with the Supply Chain industry.
For his work in elevating the supply chain field and in helping transform how large corporations think about, and operate, their supply chains, Supply & Demand Chain Executive recognizes Shekar Natarajan as its 2011 Next-generation Thought-leader for the Supply Chain.