International Supply Chain Planning, Design and Implementation.

International Supply Chain
Planning, Design and
Implementation

EXECUTIVE SUMMARY
International supply chain designing, and management is integral part of firm’s
operations. Present report deals with L’Oreal, which is multinational firm, engaged in personal
care or cosmetics industry. Supply chain network design is of utmost importance to company to
attain improved profitability and enhanced customer satisfaction. Supply chain network design
implies to assess policies and programs and to meet targets for attaining long-term objectives in
the best manner possible. On the other hand, supply chain models are of great importance.
Business models are relevance to efficient chain model and fast chain model.
Furthermore, procurement strategies like Kanban, Just in Time, Global Sourcing and
Green Purchasing are discussed so that manufacturing can be done in a better manner by
sourcing appropriate materials from suppliers. Apart from it, cross-functional supply chain
drivers are explained which pricing, information and sourcing are forming the backbone of
business model adopted by L'Oreal. CPFR contributions to both reactive and proactive response
models are enumerated. Lastly, need of change of supply chain network design is required and as
a result, recommendations are provided so that L’Oreal may further improvise upon its
strategies.

TABLE OF CONTENTS
Organization Overview Need for Change in Supply Network Design............................................1
Explaining Two Supply Network Configurations and Relevance of Models to Organization.......2
Adoption of Response Based Business Model................................................................................3
Highlighting Procurement Strategies and Recommendation of Strategies from Push Based to a
Pull-Based System...........................................................................................................................4
Adopting Collaborative Planning, Forecasting and Replenishment [CPFR] Concept....................5
Cross-Functional Supply Chain Drivers..........................................................................................7
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................10

Organization Overview Need for Change in Supply Network Design
L’Oreal is one of the largest cosmetics organizations being headquartered in Clichy,
France. Firm have developed various activities in the field by making focus on hair colour, skin
care, sun protection, perfume, make-up and personal care products. This means that company
have large diversified activities and all its products are centred to personal care. It was founded
in 1909 and firm serves worldwide customers. Moreover, firm have reputed subsidiaries such as
Lancôme, Maybelline, NYX Cosmetics and Garnier. On the other hand, financial health of
company is quite pleasing over the years. It earned net income of € 3.98 billion at the end of
2018. While, revenue stands out at €26.93 billion and operating income at €4.92 billion.
Apart from strong financial position, supply chain network design is of utmost
importance to company to attain improved profitability and enhanced customer satisfaction. It
implies to analyse varied policies and programs with a motive to attain the targets along with
long-term objectives in the best manner possible (Handfield et.al., 2015). Business objectives
must be defined and then scope must be provided by company. By this way, network design of
supply chain is made. L’Oreal has customer-centric supply chain network design which needs to
be further improvised to enhance overall design (Supply Chain of L'Oreal. 2019). There is a need
to change this because accelerated development is absent in L’Oreal supply chain. It is a need of
hour as global operations are becoming complex and it need to adopt accelerated development
path.
Furthermore, company produces around 7 billion cosmetics commodities across its 55
brands. It needs to adapt to enhance its supply chain so that it can produce more and sell more
eventually (Eskandarpour et.al, 2015). This will give firm with better prospect in the worldwide
market leading to accomplish improved customer base and thus, imparting satisfaction to them.
It needs to balance performance in terms of luxury craft, complexity, agility etc. for generating a
greater number of SKU made of more than 1500 raw material types. Thus, with enhancing
accelerated development with priority, business will be able to improvise its supply chain
network design in a better manner.
1