Revlon has implemented Oliver Wight’s International Business Plan programme to all aspects of its operations worldwide, in line with plans to further globalisation.
The decision to go global was taken following on from the results of the programme in the European operation.
“In Europe, OTIF for new products improved from 40 per cent to 95 per cent, forecast errors halved and we made massive cuts to our SKUs – they fell from 7500 to 810”, said Simon Worraker, senior vice president of Revlon.
“Thus inventory was reduced by 50 per cent whilst service levels rose to 98.5 per cent”, Worraker further elaborated.
International Business Plan
The IBP is a business improvement programme designed for effective decision-making. It enables the alignment of strategic and tactical plans monthly, and the allocation of critical resources – people, equipment, inventory, materials, time and money – to satisfy customers in the most profitable way.
Therefore, IBP allows an organisation to plan for success and then align the entire organisation to execute against this common plan, and then review performance on a monthly basis.
“In terms of managing and monitoring progress, there are five steps in the monthly IBP review process: product management review; demand review; supply review; integrated reconciliation; management business review”, a company spokesperson explained.
The spokesperson added further that each IBP programme is individually tailored to each organisation or business.
Benefits for Revlon
In terms of benefits to Revlon, there seem to be many, according to Worraker; “Prior to the programme, processes had been disconnected and not very well documented”.
An example given of this was with planning and data validity – high levels of inventory and deteriorating service due to a lack of effective communication.
However, as a result, the organisation operates from one set of numbers, seeing improvements in SKU reduction as well as a reduction in overall inventory.
Furthermore, an increase in harmonisation (stock standardisation), was seen; by late 2009, Revlon had 73 per cent versus 43 per cent, when the IBP was first implemented.
Additionally, the percentage of stock, which was slow moving or obsolete dropped from 35 per cent to 15 per cent; the number has since dropped to single figures.
“Thus’, concluded Worraker, ‘the IBP means an improved service for customers, through the improvement of stock handling and reduced inventory – increased efficiency and cash flow – and more efficient and effective development of new products, for Revlon.”