Mr. Hassan Asif, Manufacturing Manager of L’Oreal Pakistan delivered a guest speaker lecture to BBA students studying supply chain management and marketing courses. The guest enlightened the students with his experiences of cutting edge developments in cosmetics manufacturing sector. He specially highlighted the pace at which industrial panorama is changing and how the 4th industrial revolution stays at the helm of this change. With the onslaught of digital media in social networking, the market for cosmetics industry has expanded to even those areas that previously were not considered lucrative for market share and that had attracted global players like L’Oreal to explore opportunities. Hassan mentioned that previously L’Oreal was managing Pakistan market through Indian supply base. However, with growing market potential, the company decided to establish local manufacturing setup. Some important points from the talk were as under:
- Toll Manufacturing is the choice of L’Oreal for most target markets like Pakistan. A suitable contract manufacturer is selected after a detailed capability as well as capacity check, and a facility is setup on manufacturer’s premises, thereby minimizing the investment risks for L’Oreal itself. Current contract manufacturer primarily deals in pharmaceuticals and has a good quality testing lab on premises that serves the purpose for L’Oreal as well.
- One of the most critical activities at L’Oreal’s manufacturing is to ensure lean inventory management : avoiding overstocking as well as understocking.
- The company is aggressively trying to develop local suppliers for as many supplies as possible. So far, most of the product packaging supplies are being sourced from within Pakistan (previously from India) while chemical ingredients of products come from European suppliers. Most of the equipment comes from China or directly from European manufacturers to ensure quality.
- L’Oreal would invest in the technological uplifting of their supplier if they find any lagging in otherwise qualifying supplier.
- L’Oreal acknowledges the growth in e-commerce and foresees company’s outreach to customers through this channel as well. The company is in process of formalizing its distribution through one of the reputed local portal for e-commerce.
- Company’s manufacturing facility in Paris is highly automated, utilizing strengths of AGVs and other technologies on production floor. However that level of automation in local manufacturing may be unlikely in near future because of much smaller production volumes as well as cheaper labor availability.
At the of the session, Program Director (BBA) expressed gratitude and presented souvenirs to the guest, on behalf of the school for sparing his valuable time.