A responsive and responsible supply chain

Across the entire value chain of products and services, the Operations teams work with their partners to develop the most responsive and efficient solutions. Capitalising on the power of technology and aiming to achieve excellence in all that they do, Operations lie at the heart of the Group’s economic, social and environmental performance.

We meet growing demand from consumers by building a more resilient, responsive and sustainable model every day. The strength of Operations is key to continuing to grow and outperform the cosmetics market. And we are proud to actively contribute to the Group’s sustainable transformation by innovating every day, from design to manufacturing and product delivery, in an ever more responsible way.

38 plants and 152 distribution centres worldwide
65% of sites are already “carbon neutral”
Over 6.5 billion products sold
78% of PET used worldwide by the Group is recycled PET

Highlights

Operations: the linchpin of Group performance and innovation

With over 20,000 employees whose expertise spans packaging design, product development, purchasing, manufacturing, supply chain, quality, safety, environment and more, Operations ensure worldwide compliance with strict standards in quality, safety and social and environmental responsibility. Against a volatile geopolitical and economic backdrop, Operations have demonstrated their resilience and agility by rising to the Group’s challenges day after day, in order to meet consumer expectations and strengthen L’Oréal’s position as the global beauty leader for the long term.

Local moorings, global growth

Operations secure sourcing and a steady supply of raw materials, in particular by capitalising on the Group’s global reach through a network of 38 plants in 20 countries to ensure real proximity to its markets. They also rely on a network of suppliers, who are longterm partners. L’Oréal’s multipolar model is strategically centralised and operationally decentralised with a strong entrepreneurial mindset: the Group selects its suppliers at the regional level and supports them through their sustainable and technological transformations. Inhouse product design and manufacturing at the local level mean the Group can adapt in real time to the specific expectations of local markets and innovate to meet consumers’ needs. The dermatological beauty brand CeraVe illustrates the agility of this industrial model, which made it possible to ramp up production in the United States, Europe, Latin America and China in record time. The brand was totally unknown in Europe in 2017, but successfully increased production eightfold in France between 2019 and 2021.

Supply chain 4.0

The Group has also revamped its supply chain to meet consumer demand regardless of the path to purchase, whether instore or online, as ecommerce continues to grow strongly.

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The Group’s new fulfilment centres are part of that drive, providing cuttingedge distribution centres with advanced technologies to boost responsiveness and increase the number of available services. They can handle ecommerce orders in record time and with remarkable precision using stateoftheart systems and robots. Following the opening of its mega distribution centre in Brazil, the Group laid the foundations for one of its first fulfilment centres in Suzhou, China, in 2022, and opened another at Cosmetic Park in Vennecy, France.

Crossfunctional IT solutions: the foundations of future supply chains

The remarkable acceleration in the flow of information from ecommerce requires constant optimisation and organisation. Every step of the way, the goal is to harness the power of data and artificial intelligence to boost the agility of processes and decisionmaking and better anticipate consumer needs – all while ensuring transparency and traceability across the value chain. Operations have rolled out a secure datasharing system to enhance both quality and efficiency. This transformation will continue to evolve as the industry changes and will enhance the overall responsiveness of Operations.

Operations play a key role in L’Oréal’s sustainable performance

Through its L’Oréal for the Future programme, the Group continues to transform its business with a focus on respecting planetary boundaries, involving its entire ecosystem in the process. Operations are on the front line in achieving this goal.

Innovative product ecodesign

L’Oréal has been committed to ecodesigning its products for over 15 years. The Group regularly and rigorously assesses the social and environmental impact of its products to ensure they are increasingly virtuous while maintaining their level of performance and quality. By mobilising three ecodesign drivers, the 3Rs (Reduce, Replace and Recycle), the Group aims to reach the ambitious targets it has set in areas such as eliminating virgin plastic from packaging while reducing its weight and ensuring traceability and circularity. To get there, the Group relies on innovation in packaging design and use, such as refillable containers, which are now available in all product categories. To give just one example, the iconic fragrance La Vie est Belle by Lancôme now comes in a refillable bottle.

“Carbonneutral” sites: blueprints for sustainable industry

The Group aims for all of its sites to be “carbon neutral” by 2025. The North Asia Zone (Mainland China, Japan, South Korea, Hong Kong and Taiwan) has achieved this target three years ahead of schedule at all of its sites: plants, distribution centres, administrative sites and Research & Innovation centres all became “carbon neutral” in 2022.

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The Suzhou site in China perfectly embodies the efforts undertaken: in addition to a solar park, it also installed its own combined heat and power plant, which runs on green biomass gas. By combining onsite power production with a local supply of renewable energy, it was able to become “carbon neutral” alongside the rest of the North Asia sites.

Supporting suppliers’ sustainable transformation

One of the pillars of the L’Oréal for the Future programme is to involve the Group’s entire ecosystem. L’Oréal supports suppliers as they optimise their environmental and social footprint, and shares the Group’s advances with them. The Spread the Green Vibes training programmes, which the Group has rolled out worldwide, are just one example of the support L’Oréal provides for suppliers. Recognising the Group’s efforts, CDP awarded L’Oréal an “A” rating in the Supplier Engagement category in 2022, for encouraging all players in its supply chain to reduce their environmental impact.

Industrial sites at the cutting edge of health and safety

The Group aims to achieve excellence not only for its products, but also for its sites and stakeholders, to ensure that employees and visitors enjoy the best health and safety standards. RoSPA, the prestigious British institution which strives to prevent accidents and promote well-being in the workplace, recognised L’Oréal’s efforts in the field with 58 Health & Safety Awards (including 29 Gold Awards) spanning 69 sites (which employ over 37,000 people). This year, the number of participating L’Oréal sites increased by +30%, providing further proof of the Group’s commitment to continuous improvement around the globe.

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Biomass: a carbonneutral energy source

To achieve “carbon-neutral” status at all its sites, L’Oréal is reducing energy use and revamping energy sourcing for its plants. The Group rolls out a context-specific solution at each site, taking local constraints and opportunities into consideration. In Saint-Quentin, France, L’Oréal has worked with several partners to set up a biomass power plant across from its site. The project uses local organic waste to generate biogas, which powers the manufacturing plant. The biogas plant already covers the site’s green gas needs, making it “carbon neutral”. Once it reaches maximum efficiency, it will also cover the needs of L’Oréal’s other industrial sites in the Hauts-de-France region.

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A responsive and responsible supply chain

Antoine Vanlaeys

Highlights

Operations: the linchpin of Group performance and innovation

Local moorings, global growth

Supply chain 4.0

Crossfunctional IT solutions: the foundations of future supply chains

Operations play a key role in L’Oréal’s sustainable performance

Innovative product ecodesign

“Carbonneutral” sites: blueprints for sustainable industry

Supporting suppliers’ sustainable transformation

Industrial sites at the cutting edge of health and safety

Biomass: a carbonneutral energy source

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