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Consulting Template Pack New

The document proposes a low inventory model called "Quick Replenishment" for L'Oreal to reduce plastic waste from obsolete finished goods, wherein sales forecasts would be made for short durations based on observed demand and fast-moving SKUs would have production and inventory replenished rapidly while slow-moving SKUs would be formally bought back or trial-introduced in new markets. This approach aims to eliminate inaccurate forecasting, align production with actual demand, reduce stockouts and obsolete inventory to utilize less plastic in production and packaging.

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Rajiv Reddy
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67 views2 pages

Consulting Template Pack New

The document proposes a low inventory model called "Quick Replenishment" for L'Oreal to reduce plastic waste from obsolete finished goods, wherein sales forecasts would be made for short durations based on observed demand and fast-moving SKUs would have production and inventory replenished rapidly while slow-moving SKUs would be formally bought back or trial-introduced in new markets. This approach aims to eliminate inaccurate forecasting, align production with actual demand, reduce stockouts and obsolete inventory to utilize less plastic in production and packaging.

Uploaded by

Rajiv Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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L’OREAL SUSTAINABILITY CHALLENGE

Submitted by:
Team: Joka Mavericks
Campus: IIM Calcutta

Subham Maity
Anchal Tyagi
K. Rajjv Reddy
Reducing Sales Forecast Dependency

Target Reduction in plastic waste Implementation Plan 5-year Roadmap


generated on account of obsolete FG
Based on Theory of Constraints, the distribution model can be • Identify fast and slow moving SKUs across all retail
inventory in Hair and Skincare category
optimised as follows: touchpoints
• Reduce existing inventory of finished goods drastically at • Conduct training programs for sales and
Approach Low inventory holding wholesaler and distributor level by incentivising volume
sales.
distribution team to familiarise with the new
model. Subordinate resources according to data
model with “Quick Replenishment” based pertaining to fast and slow moving SKUs
• Forecast upcoming sales for a short duration. (~1 month).
on observed demand • Identify markets where demand certainty of SKU’s
• Produce and dispatch SKU’s to wholesalers/retailers.
Based on observed demand, categorise SKU’s as fast/slow is high and introduce the new distribution model
moving. for 5-10 SKU’s by bringing wholesalers/ retailers on
Impact • For fast moving, replenish inventory at retail level rapidly board
• Eliminates inaccurate forecasting and by allocating production and supply chain resources. This • Introduce refilling systems at retail stores in these
reduces bullwhip effect will increase cost of transportation but compared to markets for fast moving products to further reduce
• Aligns production plan with actual stockouts and inventory pile up costs, this will be plastic usage and encourage consumers to reuse
demand leading to less stockouts and marginal. bottles/packages
inventory pile-up • For slow moving products, formalise buyback contracts • With increased profitability, increase investments
and introduce them in newer markets on a trial basis. in R&D along with your sustainability partners to
As a result, lesser plastic would be utilized
• The shelf space left can be utilized to hold more fast come up with more innovative packaging ideas
in production and wasted as obsolete
goods inventory, decreasing plastic moving SKU’s to increase profitability.
pollution.

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