A GLOBAL POWERHOUSE
From its small beginnings in 1959, Amway has grown to
become a global powerhouse. The company directly employs
more than 19,000 people, and its products are sold in more
than 100 countries. Gross sales were US $9.5 billion in
2015.
Amway offers some 450 individual products. Among
its best-known brands are Nutrilite vitamin, mineral, and
dietary supplements; Artistry skincare products and cosmetics; and eSpring home water-treatment systems. The
very first Amway product, Liquid Organic Cleaner (L.O.C.),
was concentrated, biodegradable, and environmentally sensitive. The company’s next big hit was SA8, one of the first
phosphate-free, biodegradable laundry detergents. Both
remain among Amway’s top sellers in the home products
category. Other products in the company’s diverse lineup
include air filters and cookware as well as sports nutrition,
weight management, bath and body care, and household
cleaning products. Consumers receive their orders either
via home delivery or by picking them up at Amway “
experience” and business centers, which handle more than 50 million pickups a year in markets such as Thailand and China.
The company distributes its products through major
distribution centers in Michigan and California, USA;
Venlo, Netherlands; Guangzhou, China; Moscow, Russia;
and Busan, South Korea. Amway also makes use of dozens
of smaller inventory stocking and shipping centers around
the world. Most of these are leased facilities managed by
third-party logistics (3PL) providers, according to George
Calvert, Amway’s global chief supply chain and R&D
(research and development) officer. “This gives us the abil-
ity to be very flexible and responsive to changes in market
patterns,” he says.
Amway owns 21 manufacturing plants across four coun-
tries: 13 in the United States, two in India, four in China,
and two in Vietnam. While it does purchase some items
from other manufacturers, its own facilities manufacture
the majority of its products. It also owns four certified
organic farms totaling 6,000 acres—two in the United States
and one each in Mexico and Brazil—and 84 acres of organic
farmland where it grows and conducts research on tradi-
tional medicinal plants in China. Amway also has more than
75 R&D and quality-assurance labs worldwide. All of that—
an integrated supply chain, if ever there was one—is an
outgrowth of Amway’s laser-sharp focus on ensuring quality
“from the ground up,” as Calvert puts it. The reason for
that focus, he says, is straightforward: to earn consumers’
confidence and repeat business, salespeople must be able to
demonstrate a product’s quality, efficacy, and true differen-
tiation from commodity products available elsewhere.
The organic farms grow crops used in nutritional and
skincare products. Even at this early stage of production,
the research and development teams work closely with
manufacturing. “We partner at the stage of selecting varietals, growing conditions, and processing conditions all the
way through to how much goes into a particular formula,”
Calvert notes. “Our supply chain starts with planting seeds
and ends with more than 120 million home-order deliveries.” Calvert adds that Amway proudly supports the local
communities near its farms by providing not just jobs, but
also schools, fresh water, medical care, and job training.
WHERE AND WHY
Strategic choices regarding whether and where to manufacture the company’s core products are based on an array of
factors, but Amway considers three to be most important,
Calvert says.
1. Laws and regulations. A country’s laws and/or regulations may require the company to manufacture locally.
For example, China mandates that direct-sales companies
manufacture the products they sell within that country.
