L'Oreal

 L'Oreal

by Jingying Feng and Dan Wu

L’Oreal is the world biggest cosmetic company with branches in several parts of the world. It traces its roots back in 1909 when Eugene Schueller developed an innovative hair dye and began selling it locally and later abroad. The business grew gradually until it began making other beauty and cleaning products. L’Oreal grew progressively until it emerged as the world’s leader in cosmetics (Funding Universe). Currently, the company deals with all ranges of beauty products ranging from skin care, hair color, perfumes, sun protection, make ups, and hair care. It is also concerned in advanced cosmetics such as tissue engineering and dermatological field. L’oreal has been able to maintain its position over time because of its innovative capabilities supported by various research and development centers in various parts of the world. The company that began as a hair color business, markets over 500 brands in all sectors of beauty products.

Responsive supply chain is the unique characteristics for L'Oreal, which is also one of the major factors that place it at a competitive advantage over others. The logistics and manufacturing function collaborates with research and development to understand the needs of customers and help in executing the strategies in anticipation to the needs of customers. L’Oreal has a wide range of consumers with different tastes. The company recognizes this and has set four main markets: consumer products to retailers and drug stores, beauty supplies to salons, luxury brands to boutiques and departmental stores, and dermatological products and active cosmetics. All these are aimed at reaching a wide range of consumers (Inbound Logistics).

In this information era, L’Oreal has developed a global IT system to aid in supply chain management. The IT system ensures that the supply chain management, production management, and marketing operate in a unified way. The system applies procedures to optimize the quality of products that virtually guarantee personnel and client satisfaction. Supply chain management is availed in real time throughout the entire organization. Of essence, use of information technology helps in managing suppliers, production, and marketing accordingly. It is the companies that respond to information technology demands that will survive the dynamic and competitive business world.

L’Oreal is open to all suppliers with innovative products. It allows people to present their products and services so as to decide on the best supplier. It gives them a chance to present their innovative products and propose new solutions and technology for the development of innovative services and products. Typically, L’Oreal team partners with others to help in production of new products and services. It does this by establishing an open dialogue to accelerate and stimulate innovation to benefit the end consumers (L’Oreal suppliers). Further, the company maintains a trustworthy relationship with the suppliers. It also plays a major role in social responsibility as a major dimension of the relationship between the company and the suppliers. When the company identifies its suppliers, it sets specific dates and time s for collecting the materials. This, with the help of information technology, eases the management of the entire operation.

The manufacturing function of the company is also critical in the supply chain management. Innovations and updates are essential in improving the quality of products produced by the business (Cosmetics design Europe.com). The company tries as much as possible to improve the quality to meet the demands of the consumers. As such, it stays ahead in technology and use of innovative capabilities to satisfy the customers. This is has been made possible through research and development. L’oreal has several research and development centers whose main focus is to progressively improve the quality of products. Innovation has always been recognized as a great aspect in manufacturing of modern day products. The research and development efforts embrace all the possibilities of improving the products and inventing new ones as well (Wheatley, 2013). 

L’Orear is recognized brand due to its production of customer friendly products and services. To maintain it’s brand new, however, is not easy. The company has to keep pace with the marketing strategies inherent in the world today. This marketing strategy begins with the packaging of products. Usually, the company packs its products in very attractive packs, which contain information regarding the product including its benefits and ingredients. The marketing function targets various cosmetics wholesalers and sophisticated retailer shops. Additionally, it has a group of well trained marketing executives and sales persons responsible for promotion of the business’s products. Because of its brand name, L’oreal products are fast moving even though their shelf life is quite long.

However, despite L’Oreal being one of the most successful companies in the world, it faces some threats in its entire supply chain. Late decisions to respond to changes affect the company negatively in this era of information technology. The business need to respond to changes as soon as possible to maintain its global position. Additionally, there are some manufacturing issues and poor designs that impacts on the entire supply chain. It is notable that cosmetic industry is becoming a very competitive industry as more businesses come up with innovative products such as Procter & Gamble, Avon, and Oriflame. The competition is stiff and L’Oreal must work hard to keep up with competition.

The company that started as simple hair color has grown to be the world biggest cosmetic company. Several people including chemists have continuously been involved in the success of the multinational corporation (L’Oreal Paris). Currently, the company offers almost all types of beauty solutions ranging from skin care, hair care, fragrances and perfumes, make up products among a wide range of beauty services and products. The researchers are progressively making huge impacts in the company’s success in this volatile business world. Amidst all the challenges, L’Oreal has maintained its position fully through the assistance of an effective supply chain management.

Videos

          

   

          

    

More information links:

• http://www.lorealusa.com/
• http://www.company-histories.com/LOreal-Company-History.html
• http://www.cosmeticsdesign-europe.com/Business-Financial/How-L-Oreal evaluates-its suppliers-to-stay-ahead-of-the-game 
• http://www.fundinguniverse.com/company-histories/l-or%C3%A9al-history/
• http://www.inboundlogistics.com/cms/article/snapshot-cosmetics-and-skin-care/
• http://ckkcooly.blogspot.com/2010/06/company-background.html
• http://www.loreal.com/profiles/suppliers/promoting-collaborative-innovation.aspx
• http://data-informed.com/inside-loreals-plans-to-implement-global-supply-chain-analytics/
• http://www.lorealparisusa.com/
• https://www.youtube.com/watch?v=vLZ08dT1Dpg
• https://www.youtube.com/watch?v=qnep9TJ8iEE
• https://www.youtube.com/watch?v=mlumXWfR_bE