L Oreal Supply Chain Analysis

The supply chain of L’Oreal is the core feature which looks after the efficient running of the entire business production and processes. Supply chain is divided into two parts one is the efficiency and the other looks after quality control.

Supply chain is the core of the company sales since it is responsible to make the deliveries to the depot, distributer and ultimately the shops. To ensure the supply chain is well maintained L’Oreal management has weekly meetings and software to record our forecast, orders placed by distributors (primary sales) and ultimately the orders delivered to the distributor.

MSO is in direct contact with the brand team. He is responsible for required production and also informs organizations about lag or delays in production and all logistics involved and other things related to production.

Forecast is based on a trend line that is predicted out of exponential sales trend graph and marketing impact added on. There are 2 major

Demand planning is carried out for a period of 5 years at L’Oreal

Promotional Value Selling is where L’Oreal managers sit together with the planning team and set targets to achieve in terms of sales and production after advertising and marketing campaigns

Base Line is the bottom line target of sales which can be achieved without any effort in marketing. This is what the brand will achieve in terms of sale at all costs

In this phase the team forecasts the demands with the supply in order to procure the material required for the manufacturing of the soap bars. The supply plan is derived from the demand plan.

Material Requirement Plan is the procurement plan in which vendors and suppliers are identified and the material is procured. The details of procurement are established and are further shared with the budget control