Amway’s expansion connects international demand to a global supply chain.
by Aaron Lazenby, August 2013
For more than 50 years, Amway has researched, developed, and patented nutritional, beauty, and home care products ranging from nutritional supplements, cosmetics, and cutting-edge skin care products to water treatment and air filtration systems. During that time, the company’s business model has depended on individual sales representatives—known as distributors—to directly sell Amway products.
In 2013, there are more than 3 million distributors. And while the Amway name invokes its American roots, the company is truly global. In fact, according to Beth Zuke, enterprise solutions manager at Amway, more than 90 percent of sales are generated from outside North America.
“Amway is very popular around the world,” Zuke says. “The business model really resonates globally, especially in countries with rapidly growing economies. It’s an opportunity for people to be entrepreneurial and control their own destiny by owning their own business.”
Growing globally, and keeping up with customers’ changing shopping expectations, requires the Amway IT team to choose technology that streamlines supply chain management and standardizes global processes. Here Zuke talks to Profit about what it takes to keep operations running smoothly, meet customer expectations—including Amway distributors—and why the time was right to upgrade to Oracle’s JD Edwards EnterpriseOne 9.1.
Profit: How are Amway products brought to market?
Zuke: We are the world’s leading direct selling company, very focused on NUTRILITE nutrition and ARTISTRY beauty lines. Amway has a comprehensive marketing area. Our marketing team works with our affiliates around the globe and also partners with distributors to discover customers’ needs.
After our marketers identify new trends, they work with our R&D team to identify product requirements. This go-to-market approach is very comprehensive and depends on our supply chain team partnering with marketing and R&D to develop products. Then, Amway can test-market and manufacture them.
Profit: What challenges has Amway management faced as the company has expanded globally?
Zuke: Right now, we are globalizing our supply chain. We operate in more than 100 different countries and territories. We need to make sure we deploy consistent processes across all of our business lines to ensure our products meet and exceed our high-quality standards.
Over the last several years, we have focused on standardizing processes. We have an executive-level global process owner team that makes sure our supply chain processes are consistent. If we need to make changes, that team is involved and engaged, and ultimately makes final decisions on process change.
The Amway supply chain has recently established a Center of Excellence [COE], consisting of subject matter experts from the business. With any big IT initiative, the COE, in partnership with Amway’s finance division, is involved to make sure that all the areas of the business are considered—the complete end-to-end supply chain. I cannot emphasize enough how important the partnership is between the business and IT.
Profit: When did Amway first start using JD Edwards applications?
Zuke: We did our original implementation in 2002 and upgraded from Release 8.0 to Release 8.12 in 2008. JD Edwards is the backbone of our headquarters and supply chain systems. We have a complex application environment with hundreds of applications.
Profit: What drove Amway’s decision to upgrade to JD Edwards EnterpriseOne 9.1?
Zuke: We decided to upgrade to Release 9.1 because there is new functionality in this release. We are converting to Unicode to meet the demands of our global expansion and improve performance. We also want to take advantage of JD Edwards EnterpriseOne One View Reporting, because that will be transformational for some of our functional areas. Finance subject matter experts will be able to develop custom real-time reporting via JD Edwards EnterpriseOne One View Reporting.
In addition to the upgrade, we are rolling in a new manufacturing plant in India to our corporate instance of JD Edwards solutions. We knew India joining our instance of JD Edwards EnterpriseOne 9.1 would promote the use of standard processes, so we adjusted our upgrade timeframe to meet the expected date for the opening of our new manufacturing facility.
Finally, one of our fundamental strategies within IT is to make sure that we are compliant with maintenance agreements. Our current version will go off Oracle Premier Support in April 2014. As a company, we want to keep current and optimize our investment.
Profit: What drove your decision to work with Oracle partner KPIT Cummins on this upgrade?
Zuke: KPIT’s team carefully examines each client’s business, vision, and objectives. Since we are rolling in our new plant during this upgrade, KPIT is helping us stay focused on designing a system that fits within our global process model.
KPIT’s UTOPIA tool, part of their Upgrade Assessment Program, analyzed our JD Edwards system to identify our customized objects and let us know when they were last run. We’ve been able to look at the results of that UTOPIA tool, and analyze and eliminate objects that aren’t being used. We look at that as a win.
Profit: What other projects or initiatives are you looking at to drive the business forward in the next few years?
Zuke: Mobile opportunities are exciting because there’s just so much potential to improve the overall experience for both our employees and our distributors. Mobility can improve the overall efficiency for everyone, from employees who want to approve a purchase order when they are on the road to a business owner who wants to manage operations from a smartphone.
This is obviously where the industry is going. We definitely would like to leverage technology to create a great experience for our users.
Aaron Lazenby is editor in chief of Profit.