How Estée Lauder Transforms Supply Chain with o9 Solutions
In this video, Naresh Rajana, Global Supply Planning Leader at Estée Lauder, discusses how the company partnered with o9 Solutions to transform its supply chain. He explains how o9's platform helped Estée Lauder improve forecast accuracy, increase agility, and enhance visibility across the entire supply chain. He also shares his insights on the importance of choosing a flexible and customizable software platform in today's dynamic business environment.
- Estée Lauder embarked on a digital transformation journey to improve its supply chain agility and responsiveness.
- The company partnered with o9 Solutions to implement a new planning platform.
- o9's platform helped Estée Lauder improve forecast accuracy by 10% and increase customer service levels to the high 90s.
- o9's platform also helped Estée Lauder reduce handoffs between demand and supply teams from multiple weeks to a couple of weekends.
- Estée Lauder chose o9's platform because it was flexible and customizable to meet the company's specific needs.
- Estée Lauder is looking to further enhance its capabilities with o9's platform by using more water scenarios, automating mundane tasks, and infusing more AI.
Hi. I'm Naresh Rajanna. I head the global supply planning organization for Estée Lauder. Prior to this role, I was leading the end-to-end digital transformation program through which we started the journey with o9.
I joined ELC to reset and, refresh our whole IBP process in the company. Estee Lauder is a premier prestige beauty company. And, as I understood the supply chain better, it's a combination of complexity that is there in a pharma supply chain and a CPG supply chain. Our global supply network was predominantly non digitized.
So all these supplier based all the third party manufacturers.
It was all a tribal knowledge that was driving all this. And we needed it to be more digitized for the Estee Lauder supply chain to be being more agile, being more responsive with increasing complexity with all the traveling consumers around the world, a longer lead time with suppliers spread out throughout the globe. And that is what necessitated the need for us to embark on this digital transformation journey. Prior to starting this whole initiative, this was pre COVID, We had very low forecast accuracy given the proliferation of the skews, proliferation of the markets, changing consumer trends, So when we embarked on this journey, the very first priority for us was how do we forecast better, how do we tap into building blocks and sales drivers at the end market communicate those into our planner.
So we are sensing and forecasting the demand better. So that was priority one. And I think one of the first things that we were able do is actually lift the forecast accuracy by about ten percent. Unfortunately, this was also the time when pandemic hit.
So a lot of those improvements kind of took a step back. But if in hindsight as we come out of pandemic, all the reactions to supplier challenges supplier disruptions, production disruptions around the globe through this capability that we put in in the supply side and also some of the demand sense inside. We were able to come out of pandemic in a much better place. We were in the low eighties from a customer service level, and we are now in the high nineties.
There's one unlock. I think the hand off from demand to supply went from multiple weeks to a couple of weekends. It was the fundamental theme of agility inside supply chain. Second, from an IBP process itself, we have hundreds of meetings in a given month that connects the affiliate commercial team or the country, commercial team to the executive leadership team.
And that whole journey of the signal and the analysis between the financial plan, demand, and the supply plan, and the gaps in those plan. There was a lot of loss in the signal. Bias has introduced less transparency, less governance on what was getting discussed in each of these forums. So this program, this tool helped us provide better visibility, better transparency and just put in more governance in terms of are we truly getting to the right IBP decisions in every step of the process?
And if not, you know, where do we need to intercept and inject? This was one of the largest planning initiatives, transformation programs that was done by Estée Lauder companies. We did a change management effort over two years that touched close to 2500 people around, the globe It was not just a supply chain project. It also touched a lot of the commercial teams in terms of sales planning, how the GMs go to market etc.
I think one of the key learnings for me during my supply chain carrier is a lot of, software and, tools are fit for specific problem types.
And, in an environment that is changing fast, we couldn't operate with tools that were cookie cutter. So the reason why we chose o9 was we needed a tool that had the back end capability to adapt to all these varying needs. And and we needed something that we could customize it and continue customizing as the business situation evolves. And that was, our primary rationale behind going with o9 for this program. In terms of the journey next, I think, where we want to do further capability enhancement is how do we do more water scenarios, free up some of the mundane work that happens in the IVP process, how do we infuse more AI to get to more touchless planning on several of the tasks that happen and just focus our time on more decision making. So those are the big unlocks that we see going forward.
A collaborative white paper with the Institute of Practitioners in Advertising (IPA) and o9 Solutions
Learn the key capabilities needed to maximize the effectiveness of commercial investments and brand growth.