【正文】 has not only developed petitive capabilities but has also actively integrated them into its daily operationsExcellenceAn anization that has differentiated itself based on strategy, process and support capabilities leveraging leading practices24Innocence AwarenessUnderstanding Competence ExcellenceMaturity Profiles Demand Planning Summary L’Or233。 L’Or233。 Move from a…167。al has developed Cross Functional Task Forces made up of 1 VP, client service rep, credit and sales to enable L’Or233。 Sales and Marketing employees hired usually have creative personalities and have difficulty with administrative/operational processes167。al’s current culture supports continuous improvement and a willingness to change . L’Or233。 L’Or233。al Canada ‘s Supply Chain anization has undergone a big transformation in the recent past in that individuals who were considered “old school” or unwilling to change were replaced by highly educated, younger and dynamic resources (5080%)167。 Communication with L’Or233。 Customers describe their relationship with L’Or233。al Response Analysis? Total respondents: 8? Overall rating: Understanding? Range of responses: Awareness to Competence? Very small disagreement among respondents for each subelement ? Average standard deviation of out of 1 to 5 scale28I. Project Scope and ActivitiesII. Overview of Our Supply Chain FindingsI. ProcessesII. Inventory ReviewIII. Maturity ProfilesIV. Organization/ People and Culture V. TechnologyIII. Supply Chain RoadmapIV. Discussion of Next StepsPresentation Agenda 29OrganizationCurrent State General167。 Despite not accepting back orders, there is a mismatch between “Shipments out” and “Soldin” for a few SKUs. There is no clear explanation for this. 16Absolute Forecasting Error Category A B C AverageHair Care 21% 28% 66% 39%Hair Color 26% 15% 21% 20%Skin Care 10% 46% 49% 35%Cosmetics 25% 47% 24% 32%Average 20% 34% 40% 32%? As expected, forecast accuracy is higher with A items , except for the Hair Color category, which needs further analysis? The overall forecasting error suggests that a forecasting tool is needed ? L’Oreal needs to review its current safety stock levels to reflect the forecasting error for each SKU in order to prevent shortages and reduce inventory17Managing PromotionsPromotional periods are known to create disturbances to demand and inventory planning across product classifications18Data Issues We expected the difference between Soldin and Shipped data to be under 5%B Class – Hair CareWe found some large deviations (up to 36%) between Soldin and Shipped data. Investigation into possible causes is required. A Class – Hair Care19Supply Issues from L’Oreal PlantsThere are strong factors that are out of L’Oreal Canada’s control and would require L’Oreal international involvement to modify? During the months leading to October 2023, the supplier had overshipped 3 times in excess of the monthly order? One shipment had to be stopped to prevent extreme inventory levels ? Results in inventory imbalancesA item – Hair CareSupply: US PlantMin order Qty. = 35,00020Supply Issues from Plants (Cont’d)A more flexible supply process results in lower minimum order quantity and stable shipping patternsC item – CosmeticsSupply: US Plant Min. order qty. = 28821Demand Patterns Stable demand Unstable demandStable except for promotion Low VolumeNegative inventory Average Demand variability (σdemand)13% ASkin Care79% CHair Care148% (13 months) 10% (last 9 months)CCosmetics36%BSkin CareAverage Forecast variability (σforecast)8% ASkin Care54% CHair Care144%CCosmetics56%BSkin CareComments Forecasting can make matters worse. Hair Care Citem. Forecasting variability is higher than demand variabilityForecasting tools are needed to obtain a good estimateHave a single demand peak in March related to promotionExample for CCosmetics:Usual Sales = 600March Sales= 7000Often corresponds to low demand volumesFor ex.: B Skin Care. Stock out for 2 monthsSuggestions Do not forecastManage by min/maxRequire a forecasting tool to be implemented to improved the processRequire a forecasting tool to be implemented to improved the processReordering timing improvementImproved safety stocks may be needed22I. Project Scope and ActivitiesII. Overview of Our Supply Chain FindingsI. ProcessesII. Inventory ReviewIII. Maturity ProfilesIV. Organization/ People and Culture V. TechnologyIII. Supply Chain RoadmapIV. Discussion of Next StepsPresentation Agenda 23Maturity Profile – Context 167。 Multistep availability checking against ATP, product allocation and planned independent requirements13I. Project Scope and ActivitiesII. Overview of Our Supply Chain FindingsI. ProcessesII. Inventory ReviewIII. Maturity ProfilesIV. Organization/ People and Culture V. TechnologyIII. Supply Chain RoadmapIV. Discussion of Next StepsPresentation Agenda 14We reviewed inventory data to assess the effectiveness of L’Oreal’s planning processesData Used167。 Determine whether the current order entry process is suitable to meet customer needs or whether a more efficient process is required. 167。 ATP accuracy is promised due to factories vague confirmations (they only agree to supply product within a months time frame). As a result, customer service reps are unable to share ATP information with customers 167。 Many products cannot be harmonized due to local legal requirements including language and DIN s12Order Fulfillment – Issues and OpportunitiesIssues Customer Segmentation and Service Levels167。al’s global sales, while the US which supplies Canada makes up 28%