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Submitted by

Kirthana S(10-06-05)
Om Prakash Kabdwal (10-06-07)
Swati Singh (10-06-11)
LOreal started doing business in India in the year 1991 through a
domestic distributor where it launched its first product, a shampoo
called Garnier Ultra Doux.
L'Oreals compound annual growth rate in last decade has been about
Today it is the second largest global cosmetics group in India.
LOreal reaches out to 2,300 towns and covers seven lakh outlets
Globally L'Oreal backs itself with the twelfth-largest media budget in
the world. In India, it is the fifth largest media spender in the
Consumer products Professional products
LOreal Paris LOreal professional
Maybelline Kerastase
Garnier Matrix

Luxury products
Lancome Active cosmetics
Ralph lauren Vichy
Biotherm La roche posay
Giorgo Armani Body shop
Managing inbound logistics is significantly more complex and challenging than outbound

Outbound shipping originates from a handful of production facilities and/or DCs and makes
numerous, regularly scheduled stops to deliver product

Compare this to timing the inbound delivery of hundreds to thousands of different raw
materials, originating from dozens to hundreds of suppliers located at far-flung global
locations, especially with regard to beauty supplies manufacturing

This is because, beauty industry is known for using some pretty exotic raw materials sourced
from unlikely locales. Awapuhi from Hawaiian mountainsides, Jojoba from Sonoran deserts,
and other botanicals, fragrances, emollients, emulsifiers and pigments from all over the globe
are routinely used in producing modern cosmetics.

Getting all these materials delivered in enough time to meet purchase orders is difficult
enough before factoring in the limitations dictated by shifting fashion trends.
When a lake is filled to the brim it looks pristine, calm even. But when the
water level drops, rocks and other hidden anomalies begin to surface.

This is how Ralph Folkes, assistant vice president of corporate transportation,

describes the decision to invest in a new transportation management system (TMS) in
2008, as a receding economy began to expose submerged rocks within L'Oreal's
supply chain.

The world's most recognizable cosmetics brand was challenged with holding vendors
compliant to inbound transportation requirements. After much due diligence, L'Oreal
USA chose Elmwood Park, N.J.-based UltraShipTMS' flagship solution,
UltraShipTMS, to help automate its routing guide and attain greater visibility.
"This approach was critical to improving the flow of components and raw materials into
our manufacturing facilities," explains Folkes. "By controlling this part of the supply
chain, we could dictate transportation and inventory management, expand visibility, and
plan ahead more accurately."
Using UltraShipTMS, L'Oreal triggered a transformation that comprised three phases:
Compliance: "We needed to convey appropriate transportation instructions to our
suppliers," says Folkes. "The cost savings from simply holding vendors and
suppliers more accountable have been significant."
Mode selection: "Shipments weighing 20,000 pounds should move truckload, not
LTL," Folkes says. "The system, not the supplier, now dictates mode."
Optimization: "We have now given our manufacturers the tools to go back to
suppliers and figure out how to ship to us more efficiently. We cleansed the supply
chain by delivering more accurate lead times. This allows our suppliers to pool
shipments, and we have freight ready to build full truckloads," Folkes explains.
In the personal care product supply chain, demand sense and respond is
a competitive differentiator. Controlling inbound transportation and
product flow at each pivot in the supply chainfrom manufacturing
plants to distribution facilities to retail storeshelps businesses pull
inventory to demand.

Capturing demand signals from the point of sale, then sharing this
information with marketing, logistics, and service providers upstream in
the supply chain, enhances visibility, grows collaboration, and increases
flexibility and economy.

By 2020, LOral will have reduced the environmental footprint of

its plants and distribution centers by 60%,through the reduction of
CO2 emissions water consumption and waste management
The very broad range of expertise
and the excellence of quality
systems at LOral mean its
industrial facilities have a real
competitive edge. an automated
storage system, the Karlsruhe
plant in Germany enjoys a high
level of automation. The upgrade
has increased the plants
productivity and speed of
Research and innovation
L'Orals Research & Innovation center in India is the groups sixth
hub globally, and includes a Product Development center in Mumbai
and an Advanced Research Center in Bangalore. The centers cater to
all three lines of business hair, skin care and make-up.
L'Oral India operates two manufacturing plants located in Chakan,
Pune and Baddi, Himachal Pradesh which cater to 90% of its
requirements in India.
LOreal takes safety very seriously and, well before it was required by law, had put in
place a safety evaluation team to ensure the safety of LOreal products for both
professionals and consumers.
LOreal International Safety Evaluation Division uses a multi-disciplinary scientific
approach to evaluate the safety of LOreal products, ensuring that LOreal commitment to
product safety is upheld at every stage in the products life.
This safety assurance procedure includes an assessment based on the latest medical and
scientific research, rigorous safety evaluations of ingredients as well as finished products,
examination of the effects of cumulative product use and ongoing safety monitoring once
a product is on the market.
Product safety studies are designed and monitored and their results interpreted and
evaluated by scientists who are specially trained and experienced in safety evaluations
Step 1: Review of Available Safety Information on the Ingredients

Step 2: Safety of the Ingredient in the Context of the Finished Product.

Step 3: Approving Safe Concentrations of the Ingredients.

Step 4: Safety Testing of the Finished Product.

Step 5: Safety Validations for the Finished Product.

Step 6: Product Launch and Post-Market Surveillance

This is the first stage in a new products life when its composition is defined by their
scientists and each formula is registered in a dossier. If it is a plant extract the
scientists will examine its botanical origin. Each ingredient of the product is then
evaluated. Once each ingredient, natural or synthetic, has been defined chemically and
analytically, as the case may be, all available use and safety information on the
ingredient is investigated.
At this preliminary stage their scientists also take into account the anticipated
consumer use of the finished product.
The final step in this first stage is to check the regulatory considerations for the market
where the product will be launched and ensure that by including these ingredients we
are complying with the local law regulating the use of them. The use of numerous
cosmetic ingredients is strictly controlled in many countries of the world today.
Following this initial analysis, they consider in detail how a new ingredient will be used
when incorporated into a finished product. To do this, they look at which part of the
body this finished product will be applied. They analyze whether it will be only used on
the face, or under the arms, or around the eyes.
In tandem with this evaluation, they look at how much of the skin surface will come into
contact with the ingredient in question. Is the ingredient going to be used in a cream that
is specific for the hands? Or will it be in a body lotion that may be used all over the
Then they analyze how often the ingredient will be used in the context of the product.
Will it be something that is applied every day? Or once a month? Or even several times a
They also examine how much of the product and, therefore ingredient, is used each time.
Finally, they anticipate all the possible mis-uses of a product
Once they have collected all the necessary information about the ingredients and
the way the cosmetic product is likely to be used, they can carry out a analysis to
establish a concentration at which a given ingredient may be used safely in these
different cosmetic products.
This analysis is a calculation that establishes the so called Margin of Safety. At
LOral this margin is typically a use level of the ingredient that is 100 times below
what is known to be safe under experimental conditions and allows us to
extrapolate from experimental conditions to real life. As a result of this calculation,
different limits are imposed on the use of the same ingredients in different product
types, e.g. higher concentration may be allowed in shampoo, because its rinsed off
skin after use and a much lower concentration will be allowed in a face cream.
Once the ingredient evaluation stage is completed and proved satisfactory, the
European Cosmetics Directive does not require LOral to go any further with its
testing, but at LOral we often submit the new product to further in-vitro tests and
clinical tests with human volunteers
The first stage of testing is done using in vitro studies in which a new product is
often compared to another, similar and well known product.
Clinical testing is carried out in human subjects when we know that the product is
safe as we want to establish the tolerance of the product in potential customers.
This is a more complex procedure as we look at objective signs as well as
subjective feelings about the product.
Once the product has passed through steps 1-4 then one of LOreal
safety assessors will give his or her approval and will sign a safety
attestation. This attestation forms is included in the Regulatory
Product Information File, supplied for each product.
LOral continues to evaluate consumer use and potential
sensitivities to LOreal products sold around the world on an ongoing
basis. A cosmetovigilance network was set up twenty-five years
ago to provide this monitoring function. The network collects,
validates and analyses, through the application of rigorous and
recognized methodology, any undesirable events which may be
related to the use of a product.
Everything at LOral begins with science and knowledge. All of LOreal products are
based-on intensive scientific research. LOreal employ 3,000 scientists who work in
state-of-the-art research centers around the world.
In addition to developing new formulas and ingredients, LOreal scientists also study
the structure and function of the skin and hair, discover new molecules, investigate
best combinations of personal care products and how to maximize product
performance and safety.
LOral, have a long-standing policy of allocating 1/3 of the companys Research and
Development resLOrealces to fundamental research projects, which are targeted at
progressing knowledge in three main disciplines: skin, hair and color.
42 factories around the world


95% of factories are ISO 14001-certified

95% of LOreals industrial sites audited with standard SA 8000

LOreals Distribution Channel Worldwide
With 290 subsidiaries, more than 100 distributors off-group and 42 plants,
all spread out in about 130 countries, LOreal is the leader of the cosmetic
industry. The group has begun its internationalization in 1912 by
following three steps:
First landing
Go native
Specialist Outlet : Luxury items such as Ralph Lauren, Giorgio Armani and Paloma
Picasso perfumes and pharmaceutical products are sold exclusively through specialist
outlets such as perfumeries, duty-free shops and pharmacies.

Hair Salons : The second sales channel encompasses hair and beauty salons and the
like. These not only use L'Oral products themselves, but also sell them to their

Retail : But by far the largest channel is retail: the supermarkets, department stores
and chemists where most of the public buy their cosmetic and beauty products. This
channel of distribution accounts for more than half of total turnover (1998: 55.9 per
cent), and the Consumer Division which supplies it is therefore the largest within
The Consumer Products Division offers the best in cosmetics innovation to the greatest
number of people on every continent. Its brands are available in mass-market channels
(hypermarkets, supermarkets, drugstores and traditional stores).
LOreal Luxe offer high-quality products through a selective distribution channel, and
provide excellent service that respects the diversity of its consumers.
The Active Cosmetics Division's mission is to help everyone improve the quality and
health of their skin, in all health care channels worldwide: pharmacies, beauty and
health retailers, drugstores and medi-spas.
The Body Shop true to its pioneering spirit, combines innovation, sensory experience
and performance. Its products are distributed mainly through a network of exclusive
Today LOral India is present in all distribution channels with 15 brands
LOral India employs over 1,600 people across four regional offices
The ramp-up of e-commerce, the personalization of products, and the management
of products data and different delivery modes.
Thank you