Our suppliers are regularly evaluated on the basis of key performance indicators. There are five sections: social and environmental responsibility, innovation, quality, logistics and competitiveness.
The challenge is to establish long term, transparent relationships with high quality, committed suppliers, thus engaging in a process of continuous improvement. The results of the evaluations are communicated to the parties in question. The performance of strategic suppliers is discussed at specific annual meetings, known as « Business Reviews ».
Social and environmental responsibility
L'Oréal wants to be a successful company in economic terms, but also wishes to set an example in social and environmental matters. In view of this, the company ensures that its suppliers adhere to current legislation, human rights and labor laws and that their actions ensure the protection of the environment and the occupational health and safety of their workers. Social and safety/health/environmental audits are frequently carried out along the logistics chain to validate the selection of new suppliers and to contribute to the development of good practice among existing suppliers.
The ability of suppliers to propose innovations, to develop custom-made solutions together with the L'Oréal teams, or to integrate environmental criteria contributes directly to the performance and success of new products.
The group has put in place a number of tools for evaluating the performance of its suppliers in terms of expertise, lead times and quality. When it comes to packaging, for example, the L'Oréal packaging teams make use of work guidelines. Made up of documentary tools and an evaluation system, this makes it possible to identify areas of improvement and to evaluate performance.
Constant research of Quality and Safety is an objective shared between L'Oréal and its suppliers. A relationship of trust with consumers is based on this. Inspired by international standards, the quality system of the group is continuously developing and improving, in line with the expectations of customers and in adherence to new - especially regulatory - requirements. It benefits from synergy between the quality policies of L'Oréal and its partners. One unique quality system in particular, which pertains to raw materials and packaging, serves as a worldwide common reference point for packaging teams, factories and purchasing departments at L'Oréal.
Quality audits are carried out all along the logistics chain, making it possible to validate the choice of suppliers and to improve existing partnerships.
From physical flow to the flow of information, L'Oréal is committed to the long-term improvement of its logistics chain management in close cooperation with its suppliers. The intention is to improve its response times, to optimize its means of production and logistics systems and to reduce the « time to market », i.e. the time it takes for a new product to reach the market, while also saving costs and improving its stock system, in adherence to international standards. Along the entire logistics chain - purchasing/provisioning, production, distribution centers, shops - the objective is to ensure the availability of products to meet the needs of clients, distributors and consumers.
A « Logistic Practices for L'Oréal Suppliers » serves as a common reference framework for the supply of raw materials and packaging destined for the group's factories. This defines a standardized operating method for the period before a product launch and defines parameters for procurement. It is also aimed at improving the performance of partner suppliers by regularly monitoring indicators of service quality and improvement.
To develop, L'Oréal needs to establish long-term relations with competitive suppliers. Their competitiveness is evaluated on the basis of their tariff sheets and an in-depth analysis of the costs, once a project has been launched and during the course of the tender procedure. There is a joint process of systematically searching for ways to optimize costs in an attempt to find the best global economic equation.