1. 1. LUSH SUPPLY CHAIN SYSTEM MEMBERS: RASHEED NATALIA KIMONE DIWAKER ANKITA
2. 2. Creator of handmade cosmetics Founded by Mark Constantine and Liz Weir Headquartered in Poole, Dorset United Kingdom Originally named Cosmetics-To-Go In 1990s Renamed as LUSH In 1995 LUSH defined as fresh & green Brought to North America by Mark and Karen Wolverton in 1996 COMPANY BACKGROUND
3. 3. To determine the forecasting policies in place by the company. To gain in depth knowledge of the companies production planning To gain in depth knowledge of the companys procurement strategy OBJECTIVES
4. 4. Store manager made order based on previous year sales data Reviewed orders bi-weekly Forecast could be not accurate which led to: Lost of sales Lower margin Low-quality customer service DEMAND FORECASTING Initially Currently Software solution for automation and streamlining Prophix software Leverage purchasing patterns Shift from Ordering Scared to Ordering Smart Results: Reduced on-hand inventory by 7 days Revenues growth by 15%
5. 5. Microsoft AX - all areas of business access the same data (retail, finance, production) PRODUCTION PLANNING Lush utilize software for MRP (material requirement planning) for all aspects of production: Planning Purchasing Inventory management Benefit all departments across the country has access to the same information Lush is planning to change ERP (Enterprise Resource Planning) software:
6. 6. PRODUCTION PLANNING Still have surprises Potential production bottlenecks: Labor capacity Per shift production capacity Material capacity 330,000 660,000 December 30th January 3d
7. 7. Just in Time Mentality - have the materials for production at the right time, at the right place & in the right quantity. Lush produces handmade cosmetic products which are 100% vegetarian, 65% of them are preservative free. Buys fresh products from different vendors all around the world. Things ranging from citric acid and bicarbonates. Residual muds from Morocco, SexBomb flowers from Italy PROCUREMENT
8. 8. LUSH does not store excess of raw materials in hand at the ware house: Limited space that will reduce the efficiency and will take a lot of time to go through it. Strict freshness policy to provide fresh products to the customers. PROCUREMENT STRATEGY
9. 9. Production Manager communicates with the Buying Manager Allocation of raw materials to be used for production Buying Manager places the order according to the requirements produced by the Forecasting Manager Lush calls its supply chain approach Creative Buying where a business looks beyond lowest price and bottom line, and instead buys the best, safest and most suitable products in accordance with their ethics. PROCUREMENT PROCESS CREATIVE BUYING
10. 10. Ecological Safety Measure: Less footprint on Roads, Rails & Airways Waterways: Slow method and usually takes 60-90 days. Precaution: Forecasting for a period of 3 months ahead of time. ( In case of any change in demand or custom issues) Safety lock of 100-150% in case of emergency Alternative vendors to provide at a short notice complying with their Animal Testing Regulations RISK & SAFETY MEASURE
11. 11. PROCUREMENT https://www.youtube.com/watch?v=D93eqr0yF1o
12. 12. EDI Systems: Electronic data interchange (EDI) is an electronic communication method that provides standards for exchanging data via any electronic means between two different companies, even in two different countries. They can electronically exchange documents (such as purchase orders, invoices, shipping notices, and many others). TMS: A Transportation Management System (TMS) is a subset of Supply Chain Management (SCM) software focused on transport logistics. TMS systems facilitate interactions between an Order Management System (OMS) and the Warehouse or Distribution Center (DC). A compounder is used to blend the raw flowers into powder form for the production of soaps and shampoos. Electronic Lift Truck: For transferring of materials and finished products from their respected sites. TECHNOLOGY
13. 13. Levels maintained daily No multiple locations Ideally 100-150% safety stock on hand QAD/MFG inventory management software Performs monthly inventory counts Strives for 75% min. accurate inventory count Does not follow inventory management index INVENTORY MANAGEMENT
14. 14. Lushs primary mode of transportation for receipt of raw materials is air and sea Lush uses intermodal transportation services Motor Carrier is used for delivery from factories/warehouses to retail stores Lush uses a mixture of Truck Load (T.L) and Less than Truck Load (L.T.L) Lush uses a Transportation Management Systems Software Outsourcing to third party logistics is utilized for domestic and U.S deliveries TRANSPORTATION
15. 15. Backorders Perfect Order Measurement Inventory measurement PERFORMANCE MEASUREMENT
16. 16. Two distribution centers Bins and tanks Trays and crates Racks Gloves and Nose guards Safety precautions STORAGE AND MATERIAL HANDLING
17. 17. Serves customers through its stores and website Customers can return the product by contacting the customer service number Communicate with the company through the publication of Lush Times CUSTOMER SERVICE
18. 18. SUPPLY CHAIN SINCE PAST 10 YEARS Collaboration with farmers in sourcing raw materials such as flowers and coffee More Distribution centers Sustainability reuse of recycled organic materials and plastics Leverage software
19. 19. RECOMMENDATION Mixture of large and small trucks in their fleet. This will ensure that large trucks are not being used for delivery of only a few items which will result in cost savings on fuel. Invest more on thick plastic bins that can hold the powdery materials during winter time and not dry up. Since dry powdered results to more inventory waste and waste of time to produce. Increase of stores for better reach of consumers. Lush has one major store at Eaton center.
20. 20. WHY IS SUPPLY CHAIN IMPORTANT TO YOUR BUSINESS? By Nick: Ballistic Production Manager for LUSH
21. 21. THANK YOU