Ref: IMD-7-1929

Case study

Reference: IMD-7-1929

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L’Oreal's ACD supply chain puzzle: Diagnosing the root causes of underperformance

Ralf W. Seifert

By Professor Ralf W. SeifertRalf W. Seifert and Richard Markoff

This case depicts an actual, real sequence of events in L’Oreal’s Active Cosmetics Supply Chain. The case provides an illustration of the challenges facing large, multi-national organizations in aligning their supply chain planning along several dimensions. The span of the planning is from customers in several markets to the centralized production at the single source factory. The framework for laying out the facts of the case is the senior operations management request to conduct a supply chain planning audit on the Active Cosmetics planning process. The audit request was a direct response to complaints regarding customer service levels by general management. The case begins by setting the narrative that sets the audit in motion. Key actors across the supply chain speak their voices through testimony to the auditor, who serves as protagonist in the story of the case. This vehicle permits the case to express different points of view with objectivity, allowing the reader to consider the validity of each actor’s behaviour using that actor’s perspective. The case ends with a challenge to the reader to finish what the narrator has started. Having seen the case through his eyes, the reader must now experience the rest of the story as the narrator experienced, and prepare their own analysis and presentation for senior management.

Learning Objective

  1. To illustrate the organizational challenges in large, multinational teams, where information is difficult to disseminate, alignment is difficult to obtain and incentives can distort good intentions.
  2. To deepen understanding of the technical and managerial challenges of supply chain planning in a complex, multinational configuration.
  3. To learn how to transform an analysis into a coherent presentation for senior management.
KeywordsAlignment, Challenge, Forecast, Multinational Corporation, Supply Chain Planning
TypeField Research
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Reference: IMD-7-1929

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Case study

Reference: IMD-7-1929

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