Leadership in Logistics, a Québec Perspective
L’Oréal Global Strategy, Local Action
As I mentioned in my previous editorial I will present you with some of the companies which are actively involved in logistics activities in Québec.
Being “somewhat” bias, I will begin in this editorial, with L’Oréal.
Most companies have global strategies and local initiatives to execute that strategy. L’Oréal succeeds quite skillfully, by mirroring their global strategies in their local initiatives around the world. Let us have a look at how it is being done in Canada.
On June 17 2002, L’Oréal Canada announced major investments in the borough of Saint-Laurent, Québec. The company is investing $100 million to expand its production plant, its logistics center and its consumer service and technical training center. L’Oréal Canada will create more than 100 new jobs over three years. The company, a subsidiary of the French multinational L’Oréal S.A. is the largest cosmetics company in Canada and the only manufacturer of hair care products based in Québec.
L’Oréal, Global Strategy
L’Oréal is present in 150 countries around the world. With 47 manufacturing plants and 88 distribution centers, L’Oréal produces and distributes thousands of high quality products to millions of consumers on all continents.
Brand Development
The company invests more then 3 percent of its revenues in research and development to constantly offer consumers new products born from the latest technology.
Sophisticated marketing plans are implemented worldwide to develop and to explore new markets and to gain market share. The brands are regrouped into four categories: Professional Products, Consumer Products, Luxury Products and Active Cosmetics.
Product Quality
Quality is a key objective for the manufacturing plants and a fundamental element of the success of L’Oréal. Every plant plays a specific role in support of the integrated global manufacturing strategy of the group. They are subject to very strict quality standards from the group and to ISO certification. Internal and external audits are conducted on a timely basis. Safety and environmental programs are in place in every facility. The results are benchmarked on a monthly basis and standards upgraded for the highest achievements
Logistics Efficiency
In order to support global marketing and manufacturing strategies, the group has to rely on efficient logistics, a key enabler for success. As a result, new logistics functions and groups are emerging and being organized in many countries around the world. Distribution facilities and information system projects have received full attention and support from the company’s management. The company is moving towards greater logistics efficiency and excellence.
Qualified Workforce
L’Oréal is very active in recruiting new talent and qualified employees around the world. With a strong presence in the universities and via its internet site, L’Oréal is becoming the first choice of many graduates. More so, since the well being of the employee is of key importance for the company any initiatives to offer customized services to employees are welcome and being implemented in many facilities.
L’Oréal Canada, Local Action
The Brands…
Since its creation in 1958 L’Oréal Canada (formerly Cosmair Canada until 2000) has strongly supported the brand development strategy of the group, with a strong track record in business growth. Today, the Canadian portfolio counts 19 international renowned brands: L’Oréal Professionnel, Matrix, Redken, Kérastase, L’Oréal Paris, Garnier, Maybelline, Ombrelle, Lancôme, Biotherm, Helena Rubinstein, Ralph Lauren, Giorgio Armani, Cacharel, Guy Laroche, Paloma Picasso, Kiehl’s, Vichy and La Roche-Posay. These products can be found across Canada.
Many new product families are introduced in America via the Canadian market. One of the latest successes is Fructis with five million units sold in Canada in 10 months. L’Oréal Canada has had a steady growth in sales since its establishment in Canada, with over $550 million in sales for 2001.
The Product Quality
Established in 1968, the manufacturing plant in Saint-Laurent, under the L’Oréal Global manufacturing strategy, specializes in hair coloring products. The products are destined for the Canadian market and also exported to over 15 countries around the world. The production will increase by 60 percent over the next three years, to reach up to 150 millions units per year. The St-Laurent plant has become one of the key manufacturing assets for the group and is renowned for its quality, flexibility and cost efficiency. The plant is certified ISO 9002 since 1997.
The Logistics Efficiency…
Centrex, the new logistics center is the home of the supply chain management team. All logistics activities are performed or controlled through this facility.
The customer service team is mandated to define the customer requirements and to monitor the orders and the promotional activities until completion.
The procurement group translates the sales forecast and marketing activities into procurement plans. The purchase orders are placed with the manufacturing plants on a timely basis. The inventory replenishment orders are monitored and expedited to assure required service level is attained.
The operation team prepares more than 600,000 orders a year with the 9,600 SKUs of the 12 business divisions. These orders, representing 3,500,000 cases, are shipped in trailer load, less than truck load or by courier service to more than 4,000 customers/ retailers in Canada.
With a large variety of orders (units and case picking) of different volume and type (regular or promotional), the operation needs to be highly flexible.
The newly implemented integrated SAP system supports the operation. Order entry, EDI transactions, receiving, quality control and directed putaway activities, inventory allocation, order prepackaging, wavepicking, and assisted order preparation, including kitting and shipping activities are controlled by the system.
At Centrex the emphasis is put on the empowerment of the 300 employees to meet customer requirements. The focus is on operation efficiency and agility.
The Qualified Workforce and its Well Being…
L’Oréal Canada is living up to the group commitment to recruit talented employees and to give them careful attention. In addition to the modern environment, including cafeteria services and an internet café offered to the employees, it is now the first subsidiary in the L’Oréal Group to offer a daycare service with a capacity for 36 children in the workplace.
Conclusively, the announcement of L’Oréal Canada on June 17th confirms the company can pursue its mission with the full support of the L’Oréal group. L’Oréal has definitely succeeded to apply the global vision and strategy into a local reality of its subsidiary, L’Oréal Canada.
In the next editorial we will write about government initiatives and programs to support logistics projects development in Québec.