Discuss about the Logistics Management for Loreal Company.
The report presents a brief overview of logistics management of the L’Oreal Company. It explains the significance and function of the logistics management. In addition, the report also describes the current order cycle system and current stock management of the company. It also tells that how to interface and its core functional areas play an integral role in logistics management.
L’Oreal S.A is a French cosmetics company which head office located in Clichy, France. The company was founded on 30 July 1909 and its registered office is located in Paris. It is one of the biggest cosmetic companies in the world. It deals in various cosmetics and beauty products. It concentrates various activities in the field of cosmetics such as hair color, sun protection, makeup, skin care, hair care and perfume. There are approx 89,300 people are employed in the company. The Jean-Paul Agon is the CEO of the firm. The company is expanding its business activities and operations day by day. The company provides various cosmetics products to men and women globally. The total revenue of the company is approx €25.837 billion. The company is listed in the stock market. The Proctor & Gamble Company and the Estee Lauder Companies Inc. are the main competitors of the company. The firm is offering the attractive and excellent quality of items and products to women and girls (Fernie & Sparks, 2014). It is one of the biggest cosmetic brands across the world. It is the French brand which deals in various cosmetics and beauty products.
The interface is a method and technique that supports the association to collaborate, converse and cooperate with various obstacles and barriers’ of the firm. The logistics management is the core function of the every organization. The core functional areas of logistics management are production department interface, marketing department interface and accounting and finance department interface (Zhou,Chen, Li, Luo, Song, Duan & Yang, 2014). The interface between logistics and important functional areas like marketing, accounting, and finance and production interface are essential and mandatory for the company to meet the firm long-term business goals and objectives. The harmonization and cooperation are mandatory to maximize the total value offered by the company. Further, the interface between the logistics and core functional departments also play a significant role to ensure the optimum utilization of resources. Further, the military theory of logistics management is very popular in the company. The interface is an important and helpful technique for the L’Oreal Company. The three core functional areas of logistics management of L’Oreal Company have been discussed below (Christopher, 2016).
Production department interface
The production department of the L’Oreal should be done in such a way that the whole actions and operations of the production and manufacture run efficiently and it helps the firm to increase the revenue and productivity of the firm. The production of the company depends on the cost and quality of the cosmetics products. The logistics management contributes in production department interface. In this company, the managers, and top management check and evaluate the quality and quantity of the products to gain the long-term goals and objectives of the company. In this way, the company can attract more customers in the market. The production department interface of this company checks and evaluates that how the firm maintains the quantity and quality of the cosmetics products in the market. It is essential to production department that it should understand the needs, expectations, and requirements of consumers especially women’s. In this way, it will help to provide satisfaction to the customers in the market (Mahon, Salvati, Bombelli, Lynch & Dawson, 2012).
Marketing department interface
There is a close relationship between logistics management and marketing department interface. The marketing department interface includes the various areas such as product mix, promotional activities, market research and pricing decisions. It will provide help to improve packaging and better information flow. Further, it would be helpful for the distribution channels and better customer service. In marketing department interface the company focuses on the four key perspectives while edging with the market. These 4 perspectives include the intersections, relabeling, unionist and traditionalist (Kose, Otrok & Prasad, 2012).
Accounting and finance department interface
A strong logistics management helps to the company to provide the various economic benefits in the market. The L’Oreal Company also takes the support of the logistics management to achieve the outcomes and result of the company. The accounts and finance department check and analyze the financial and accounting activities and transactions of the company. The various costs and expenses are controlled by the accounts and finance department. This interface helps to make an appropriate budget for purchasing and allocating of various resources. Moreover, the finance and accounting department interface also beneficial to reduce the inventory cost, production unit cost and packaging cost (Henderson & Ferreira, 2013).
Current order processing system
The order cycle refers to the moment between the placing of a single order and the subsequent order. It is a particular time and instance period among the two orders that have been sighted in order. The time period between placing and receiving of the order, it is called order guide time. L’Oreal firm is using the excellent and effective order cycle methods and techniques in order to gain growth and success in near future (Palmer, 2012).
After various researches, it has been evaluated that the current order dispensation system of this company is unique and effective. It can be measured through the data and figures which are calculated by the company that around 67% of United Kingdom girls and women use L’Oreal cosmetics products. It has been analyzed that L’Oreal products and logistics business are managed by the world-class qualified and effective consultant team. Therefore, it is improving the effectiveness and efficiency of the current order processing method of the company. However, it is also evaluated that the company takes various kind of information about the product through Edicom’s CRP flow. The consultancy team of the L’Oreal Company is trying to overcome all the issues and obstacles and it is making the current order processing system more efficient and effective (Ashraf, Ashraf, Azhar & Anam, 2015).
It has been analyzed that the company uses order management software that helps and supports to the company for providing accurate and correct order facts and information in a single place that is available for every sales worker all over the firm. The use of this order cycle method helps and guides the association in such a way to decrease the cost and time. Further, this system also helps to provide customer satisfaction at all levels of customers in the market (Duflot, 2014).
Recommendation for current order cycle system
Although the current order processing method of the L’Oreal is excellent and efficient but in today’s universal and competitive business and trade environment, it is necessary for the firm to arrange proper review and monitoring to maintain and manage its efficiency and effectiveness at all level in the market (Scott, Lundgren & Thompson, 2011). It is recommended that the L’Oreal Company must manage and control changes in the current order processing method according to changes in the technology and environment to confirm its sustainable growth and success. Further, the association should properly update its order management application and software to provide better services to its customers. It is also suggested that the company should effectively and efficiently integrate the order administration function into the order process to resolve various barriers associated with delivery time and speed. In addition, the firm should provide its product at reasonable prices so that middle and lower category customers can also purchase the products of the company (Šírová, 2015).
Current inventory management and recommendations
Inventory management is the important function of the company to gain the growth and success of the market. It has been evaluated that after normalized and regulated stock supply processes and wrapping in Europe, a supply chain cockpit founded by the association which believes the targets and association KPIs. The cockpit is interconnected with manufacture development information across 13 European plants. Further, the stock management and appearance of the cockpit is also expanded by connecting it to above 100 dealers with the help of web portal and straight exchange data from the Enterprise resource planning system of the dealers. The supply chain cockpit is important and excellent to manage and control the stock of the company across the world. It also pursues a method and strategy to maintain one month stock in extra at the CFA level in the month beginning (Strydom, 2011). It also keeps one month inventory in the warehouse. This approach increases and enhances the firm inventory holding cost. In addition, Improper forecasting is a major issue in this company thus, it is mandatory for the company to improve forecasts for reducing the firm inventory holding cost and it also increases the profit and revenue of the company. The use of advanced technologies like CRP/VMI supports and guides to the company to optimize and utilize the resource and good delivery at the point of sale. In this way, the firm maintains the adequate and proper inventory level. The L’Oreal uses the supply chain index methodology which is used to estimate and predict the supply chain in the company to manage the cost and time effectively (Kaynak, Mockler & Dologite, 2014). The current inventory management of the company is very effective and efficient. Further, the company has developed an integrated solution for industrial systems to handle the order management, real-time material movement, and inventory management. The implementation of ERP solutions and OM help to reduce the cost and risk related to the inventory management.
Now it is suggested that the company must focus on aligning the needs and requirements of logistics function, operation, inventory management and manufacturing function. Further, the L’Oreal Company should focus on implementing and executing the real-time application which is available 24*7 in order to ensure the efficiency and effectiveness of the inventory management. It will also ensure the long-term growth, success, and survival of the company (Corominas Sotero & García Santos, 2013).
Now it is concluded and analyzed that interface of logistics management is beneficial for every organization in order to ensure the growth and success of the firm. It also ensures the optimum utilization of resources and it also provides business growth and success. It is reducing the production cost and enhances and provides customer satisfaction to people. Further, the current order cycle system and inventory management are effective and efficient of the L’Oreal Company. It has been evaluated that use of advanced technological systems, solutions, and software such as ERP, OM, ISIS assist and support the managers to reduce the cost and manage the risk of the firm. But at the same time, various key challenges and issues like changing customer needs, requirements, speed, complex and difficult business nature. So it is recommended that the company must implement some monitoring programs and campaigns to ensure the success and growth of the company. In this way, the company can build and maintain a strong position in the market to attract more men and women in the market.
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