Operating since over two decades in India, Amway offers around 10 brands and thousands of SKUs in nutrition, home, beauty and personal care products. It also takes pride in its contributions towards Make in India and driving a sustainable supply chain. With a global presence in more than 60 countries Amway’s complex supply chain network includes a global warehouse management platform that improves inventory management and traceability, increases throughput and helps standardise business processes worldwide. In this interview with Logistics Insider, Rahul Gupta, Senior Vice President Procurement (Europe, India & Central Asia), Amway India gives insights into some interesting facets of their supply chain.
Which locations do you majorly source raw materials from? What impact did the war have on your procurement function?
Amway India imports its raw materials globally from countries like Europe, China, and predominately from India and the US. The impact of the Russia-Ukraine war was found in our procurement of wheat, whey proteins and production cost on other raw materials. In addition, supply chain disruptions led to increase in the freight charges, created container shortages, and lowered the availability of warehousing space.
Shutting down of ports impacted shipping cost and delayed cargo flows worsened the global supply chain conditions. However, keeping such global uncertainties in mind and also the global health pandemic, Amway as a part of its risk-mitigation strategy started evaluating all potential risks in its existing supply chain and developing a mitigation plan for uninterrupted supplies. Also, considering Amway mono-source model for majority of its items procured, we have adopted more proactive approach towards Supplier Relationship management practices.
How important is it for Amway to maintain transparency and traceability in your supply chain? What is being done in that direction?
For today’s health-conscious consumer product’s quality, transparency, efficacy, and traceability matter the most. For Nutrilite, global leader in nutrition and the flagship brand of Amway, with its seed-to-supplement approach and strong ingredient story, transparency and traceability are critical components.
Amway’s backward supply chain is fully transparent, and every step of the supply chain is completely traceable. We also maintain traceability at many of our suppliers to support our seed to supplement story.
At Amway for the Nutrilite range, traceability is a meticulous ninestep process that starts with a farm-level view of its botanical ingredients and follows each and every step involved in making and distributing its products. It starts with the choice of right ingredient and tracks every step to ensure it stays pure, safe and effective throughout its journey to end product. Further, Nutrilite has partnered with Ecocert, an international inspection and certification body to verify the Nutrilite botanical traceability practices throughout the supply chain, including at the manufacturing and farm level of our suppliers with intense onsite audits and document verification.
Amway’s traceability and sustainability efforts have been described as ‘brother & sister’. What are your thoughts on it?
Traceability and sustainability are considered together in agriculture because they are closely linked. Traceability ensures that customers know where the ingredients in their favorite products came from and how they were made, giving them confidence in the quality and safety of the products they are buying.
Traceability also adds value to the supply chain as it puts an extra layer of accountability in place, ensuring our partners practices are not exploiting limited or protected natural resources. This high level of transparency gives consumers not only the right information they deserve, but to also promote accountability from producers to maintain food safety at every step. However, just because an ingredient is traceable, it doesn’t mean it is grown sustainably. Sustainability refers to the ability to produce botanical ingredients in a way that is environmentally friendly and preserves resources for future generations. Combining traceability with sustainability helps to ensure that agricultural products are not only safe for consumption, but also produced in a way that is good for the planet. Together, traceability and sustainability can help to create a more sustainable and responsible food system.
This is an abridged version of the interview published in the February edition of Logistics Insider Magazine. To read the full interview click here.