L’Oréal and suppliers collaborate in cloud-based Control Tower

L’Oréal, the world’s largest cosmetics group, is in the process of rolling out a sophisticated Control Tower system that is allowing it to synchronise information with all its vendors and thereby respond much faster to market events. It employs over 70,000 people, has four business divisions, 27 international brands, 42 factories, 145 distribution centres and thousands of suppliers around the world.

By Helen Armstrong, freelance editor of Supply Chain Movement

“We have always shared production plans and requirements with our upstream trading partners so that we can organise production and build inventory around these forecasts,” says Richard Markoff, L’Oréal’s Supply Chain Standards and Audits Director.  However, it remains a challenge to collaborate with the thousands of vendors who supply the boxes, bottles, labels etc. because everyone works a little bit differently; for example some send emails, some send excel files, or use the phone.

Same version of the truth

Richard Markoff“Then we came across E2Open, which specialises in Control Tower collaboration portals for the supply chain. We put our data, such as a forecast for a packaging component, into the cloud and our vendor can go in and retrieve an electronic message.  This can be integrated into their IT system or downloaded into Excel. They examine the information and respond back by EDI or via this collaboration portal.

“Now, by using this cloud a vendor has data from all L’Oréal factories in one place and likewise our factories can see all the responses from vendors. Everyone has same version of the truth,” says Markoff.

Global ambition

L’Oréal piloted the E2Open Control Tower last autumn in its factory in Little Rock, Arkansas with two vendors. Based on the good results the company now has ambitious plans to roll it out fully in the USA by the end of the year and it is organising pilots in Europe. “Our ambition is to have one global collaboration cloud for the entire L’Oréal.” Markoff sums up the benefits:

Firstly we have fast propagation of information so we all can react faster, whether it be to a launch, a promotion or, for example, when a high profile person starts wearing one of our eye shadow shades.

  • We have greater efficiency. Within this portal everyone has the same version of the truth so we can immediately go to the heart of the matter and have conversations around the point where we should be adding value.
  • We are investing in our supply chain community by giving our people good tools to do their job. This helps L’Oréal keep a competitive advantage in terms of supply chain talent.
  • We see no end to the collaboration possibilities that can be achieved by using this portal once we have the interface with our vendor community in place. At the moment we are sharing forecasts, delivery and inventory data but in the future, for example, it could allow us to react when we have a commodity shortage.

“We kept to the E2Open standard portal so that we could get the project up and running fast. We found it very compatible with what we wanted but there is a reasonable amount of customisation and other parameters available to get it right for you,” says Markoff.

Train people

Vendors don’t need to make any direct investment to have access to the portal. However, if they want to integrate the data directly into their IT systems they may need to adapt software and train people. In return, they have the benefit of a more sophisticated tool, to see information very quickly, make exception based reports and see the same data extractions and reports as L’Oréal.

“This EDI portal also allows our vendors to organise their own supply chain and production efficiently but without us falling into the trap of trying to run their supply chain for them,” he says.