Elizabeth Arden improves purchase order accuracy by more than 32% by leveraging The Smart Cube's advanced analytical services

Elizabeth Arden is a global beauty products company with an extensive portfolio of prestige beauty brands sold in over 120 countries.

The company's brand portfolio includes Elizabeth Arden skincare, colour and fragrance products; its professional skin care lines, Elizabeth Arden Rx and Elizabeth Arden PRO; the celebrity fragrance brands of Britney Spears, Elizabeth Taylor, Jennifer Aniston, Justin Bieber, Mariah Carey, Nicki Minaj and Taylor Swift; the designer fragrance brands of Juicy Couture, Alfred Sung, Geoffrey Beene, Halston, Ed Hardy, John Varvatos, Lucky Brand, Rocawear and Wildfox Couture; and the lifestyle fragrance brands Curve, Giorgio Beverly Hills, and PS Fine Cologne.

The company is a major player in a competitive marketplace thanks to brand recognition, product quality and customer service. The company is defined by its entrepreneurial spirit and a commitment to innovation. With many product lines in many countries, the responsibility of ensuring the company's procurement and manufacturing processes are running at optimal levels is the responsibility of the company's Senior Vice President of Global Planning, Procurement and Manufacturing, Mr. William C. Babuschak.

Elizabeth Arden employs a procurement model wherein third party contract manufacturers (CM) do the transactional buying with raw material and packaging suppliers based on parameters that have been negotiated and set by Mr. Babuschak's team (e.g. pricing, lead times, minimum order quantities, etc.). Since the "directed turnkey" method leverages several third party contract manufacturers with different data systems, it can result in discrepancies between the contract and invoice prices that can negatively impact budgeting and cash flow if not adequately monitored and controlled.

To address this challenge, Mr. Babuschak and his team's Manager of Global Sourcing, Ms. Jessica Walters, enlisted The Smart Cube to help his team establish a process for tracking purchase price variances (PPVs), identifying underlying causes, and mitigating transactional risks and losses, allowing them to:

  • Manage Large Transactional Volumes and Differing Sources of Data: Combine large volumes of purchase order and inventory data from various manufacturers into a single point of data to create a baseline for comparison.
  • Make Accurate Cost Assumptions: Improve the quality of product cost data used to make profit and loss projections, obtaining visibility into total go-forward spend.
  • Optimise Product Costs: Mine for opportunities to drive unit cost reductions based on an understanding of current inventory commitments and stock levels sitting off-book with manufacturers.


Mr. Babuschak and Ms. Walters engaged The Smart Cube to do an in-depth analysis into Elizabeth Arden's procurement and manufacturing data and processes and decided to bring the lead expert analyst onsite to take a deep dive into the situation and the company's desired outcomes.

Mr. Babuschak and Ms. Walters were impressed with the speed, quality and efficiency of the analytics project and stated that The Smart Cube's insight and deliverables were not only outstanding, but also extremely actionable – as his team could quickly understand the analysis and effectively act on it for fast, measurable results.

"The Smart Cube took a very proactive and forward-thinking approach and offered us a solution that would help us do powerful data analysis and provide actionable insights, which would help us substantially improve our purchase order accuracy," said Ms. Walters.

Within weeks, The Smart Cube created a consolidated view of Elizabeth Arden's turnkey manufacturers' data – which included seven different external data sources – showing for the first time a full picture of what this entire network was buying on the company's behalf.

"For the first time since implementing the directed turnkey model, we received consolidated analysis that provided visibility into $110 million dollars of future purchases that were being made on our behalf," Mr. Babuschak says. "Given the scale of this amount, it jumped out how beneficial this analysis could best be used to improve our company's efficiency and profitability."

The Smart Cube established a business process starting with receipt of raw data feeds from the manufacturers that is standardised, consolidated, and cleansed. A variance calculation tool then compares the purchase order prices to internal price standards, and key insights are presented to Elizabeth Arden's procurement team through an interactive, easy-to-understand dashboard. This enables them to code variances and conduct necessary investigations before The Smart Cube updates their filter for subsequent analysis. "I didn't expect a partner that would have the insight into the Procurement function to help us build business processes in this space," says Mr. Babuschak. "They continue to deliver value and new insights as the project evolves."


Since their engagement with The Smart Cube began, the Elizabeth Arden procurement team has been able to:

  • Proactively Monitor and Control Purchase Orders: With detailed information on order compliance, the team can act on variances that would otherwise grow significant dollars over the course of the year. Mr. Babuschak explains, "That's what this new way of looking at the data every month and checking it for accuracy has enabled for our business."
  • Improved Predictive Cost: The first compliance report prior to leveraging The Smart Cube's solution, showed 18% accuracy, meaning 82% of the purchases resulted in some variance to the master data/parameters expected versus what was transacted. Since leveraging The Smart Cube's solution, accuracy has increased to 50% – a 32% increase overall greatly reducing the volume of rework and reconciliation.
  • Expect Cleaner, More Accurate Data Over Time: Elizabeth Arden and turnkey manufacturers can start out next year with new standards and more accurate purchasing master data that they can use to better predict and affect cost of goods sold.

Moving forward with The Smart Cube, Mr. Babuschak says he wants to get more visibility into the health and quality of inventory on the books. "I continue to push all of my suppliers to try to engage with The Smart Cube," he says, "Because it certainly makes us a better company and I think the model is applicable to just about anybody in our industry.

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