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L’ORÉAL GOT BETTER QUALITY AT LOWER COSTL’Oréal has reaped considerable benefits from concentrating its Scandinavian logistics in the Copenhagen area.
Costs have fallen significantly over the last eight years since the French cosmetics giant L’Oréal moved its then-existing distribution centres in Denmark, Norway and Sweden to a new 12,000 m² warehouse south of Copenhagen.
Over the same period, the company and its customers have also experienced improved quality in the form of faster deliveries. In addition, the greater volume has made it easier to attract highly qualified staff, not least within IT.
”We can document that centralising our warehousing facilities has given both significant savings and much improved quality,” says General Manager and Shared Services Director Peter Trabolt, who has been with L’Oréal since the decision was originally taken over ten years ago.
”The savings result from fewer storage days and reduced incoming transport costs. Our products arrive here from eight European factories and, thanks to the large volume, we can always fill our lorries. In principle we therefore only transport full loads. Our fill rate is as high as that of our colleagues in Germany, which is of course a much larger market. Putting an exact figure on the savings we’ve made is naturally difficult, but it’s more likely a double-figure percentage than a single-figure one,” says Peter Trabolt.
FEWER STORAGE DAYS
The number of days products are kept in storage has also been considerably reduced. In comparison, L’Oréal’s Finnish warehousing facility, which is still an independent unit, has 20-30% more storage days than the Scandinavian distribution centre in the Copenhagen area.
”A single large warehouse is very much cheaper to run, partly because it’s more worthwhile investing in new technology,” says Peter Trabolt.
IT STAFF WITH 200 YEARS’ SAP EXPERIENCE
”When we started, we had two SAP systems plus local versions in the Netherlands and Belgium. Nowadays, we’re all on the same system. The IT department has grown from 5 to 35 employees and the increased volume of products has made it easier for us to attract specialists in various fields. Altogether, the IT department has, for example, almost 200 years’ experience of SAP, and several members of staff have a sound commercial background,” says Peter Trabolt.
The company has experienced considerable growth over the last three years. L’Oréal has taken over several well-known brands, and both turnover and product number have doubled within this period.
”Such growth requires a strong organisation. We have 2,500 customers, and we have promised them that they will receive goods ordered before 10.30 the following morning. Such stringent deadlines are necessary if you wish to operate in Scandinavia, and right from the start we have put much effort into coordinating and standardising as much as possible. We still do, and it’s absolutely crucial,” says Peter Trabolt.
The rapid growth has also put pressure on the warehouse in Greve. It has simply become too small, and is therefore presently being extended with an additional 5,000 m².
L’Oréal has just over 300 employees in Denmark.