Warehouse|DC News

L’Oreal: To Automate or Not to Automate

Like many global companies, L’Oreal is facing new demands from its customers in a dynamic market; robotic layer picking and slotting software are two of the tools the health and beauty leader is using to stay competitive.

As one of the world’s largest manufacturers of cosmetics, skincare, hair care and hair coloring products, L’Oreal operates a number of different types of distribution centers, ranging from facilities that primarily handle full pallets to case and piece picking operations.

Each has its own set of demands and approaches to order fulfillment.

“What’s impacting our operations the most is the change in order profiles due to the rise of e-commerce,” says Erik Rodriguez, director of supply chain for L’Oreal Americas. “The sheer volume of orders has increased, but the lines per order has decreased.

Additionally, there’s pressure from our retail customers to reduce our lead times and improve our delivery times because they are running leaner inventories.”

Those customer challenges are happening against the backdrop of increasing competition for labor and a mandate to drive continuous improvements in safety and ergonomics. “In just about every major city where we have distribution centers, there is real competition for labor,” says Rodriguez.  Put them together—the need for speed, quality, service and labor shortages—and “automation becomes a way to operate successfully within the context of these competing demands,” says Rodriguez.

In fact, new demands may be changing the rules for justifying automation, at least when it comes to the traditional measure of return on investment, adds Rich Werner, vice president of physical flows for L’Oreal’s consumer products division.

“ROI is still important, but the justification for automation is no longer purely ROI. It’s also the ability to meet the surges in demand on peak order days, the quality of the pallets going out the door and the improvements in ergonomics and safety that automation can bring to an organization.”

To that end, L’Oreal is in the midst of implementing solutions as varied as robotics to automated goods-to-person solutions in its DCs on a global basis.

Automation enables the business
What does L’Oreal look for when it considers new automation technology? “We look for scalability and the ability to connect with other pieces of automation in the future,” says Rodriguez. What’s more, the automation should in some way enable the business or enable new ways to meet the needs of the market.

Erik Rodriguez, Director of Supply Chain, L’Oreal Americas

“What’s impacting our operations the most is the change in order profiles due to the rise of e-commerce.”Erik Rodriguez, Director of Supply Chain, L’Oreal Americas.

Slotting comes of age
Not all automation projects involve big capital investments in equipment. Beginning in 2012, L’Oreal began to ask what other types of tools it might be able to deploy that can be used in conjunction with mechanization to deliver a multiplier effect. One answer was slotting. L’Oreal was already using a homegrown slotting program with a lot of limitations. “We decided that slotting was something we could deploy easily and would pay for itself in a matter of months in some facilities,” Rodriguez recalls. “We also thought that it could complement what we were doing with labor management. To me, it was a basic tool.”

L’Oreal engaged a consultant from DMLogic to analyze the different suppliers and solutions available in the market from pure play slotting software vendors, from consulting organizations and as a module from one of the best-of-breed warehouse management system (WMS) providers.

Once L’Oreal decided that it did not want to be beholden to a consultant or a WMS provider for slotting, the team and their consultant compiled a list of some two dozen attributes to meet its requirements and ran a tender. Eventually, the choice came down to two pure play candidates. The ultimate winner offered a solution that could be implemented relatively easily, but offered the ability to scale and add functionality as L’Oreal gained experience with the tool.

Several areas were targeted for improvements, including:

  • a reduction in travel times to reduce order cycle times;
  • more efficient use of storage space;
  • a reduction in errors;
  • more effective storage by weight of the item or movement of a SKU to improve ergonomics;
  • more effective storage based on how pallets are formed, such as heaviest items on the bottom;
  • co-locating items that are commonly ordered together; and
  • the ability to load historical information into a forecasting tool to best slot for the rollout of a new product launch.

For the first rollout, L’Oreal chose one of its mature facilities that was already using the homegrown slotting tool. If they could show improvements there, the thinking went, then they had something. Within a few months, the lines picked per hour had improved by 12%. “Based on the outcome of the pilot, we have so far implemented slotting in 17 of our 23 DCs in the United States,” Rodriguez says. Slotting has also gone live in Mexico, Chile, Argentina, Brazil, Canada and France, with plans for other facilities in Western Europe, Australia and South Africa.

Now that it is up and running, slotting is delivering a sustainable competitive advantage. Improvements have ranged from reductions of up to 28% in bends and reaches, reductions of up to 21% in travel distances and improvements of from 10% to as much as 30% in lines per hour picked, depending on the maturity of the operation. “If you have the volume to justify the investment, it makes perfect sense,” Rodriguez says. “And, of course, you have to keep thinking about what your business is going to look like in the next three to five years to remain competitive.”


Article Topics
Trends   Warehouse|DC   Automation   Technology   Software   Distribution Center   Manufacturing   All topics


Comments
Be the first to post a comment.
You must be logged in to post a comment. Login.

About the Author
Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.
 
Latest Warehouse|DC News
Five Keys to “Click and Collect” Order Fulfillment
To meet consumer demand for more convenient delivery options, many retailers have adopted the buy online and pick-up-in-store (BOPIS, or "click-and-collect") order fulfillment model.

5 Ways to Assess Your Warehouse Technology Needs
When looking to leverage new technology, each warehouse must assess their business and determine the solutions that offer not only best practices that are tried and true for today’s customers, but also…

Material Handling Tips For Maximizing Warehouse Space
Warehouse storage space is expensive, so it makes sense to make the most of your warehouse storage capacity in order to reduce carrying costs and increase material handling efficiency.

Swisslog Optimizes Efficiency at the North Pole
Swisslog automation and software is making Santa's job easy...


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles