News29 July 2016

NEW OPERATING MODEL FOR L'Oréal DISTRIBUTION CENTER

L'Oréal is a global leader in the production and distribution of cosmetics and personal care products, present in 140 countries with a unique portfolio of 32 international and complementary brands. Currently L'Oreal Mexico is conducting a reengineering project at its distribution center, also known as Centrex, with the aim of extending its life by increasing storage density, since its current storage capacity cannot meet the increase estimated by the business units flows. In this situation, the company requested a proposal from Miebach Consulting professional services to determine the new operating model of the distribution center for the next 10 years at lower cost. The project was divided into three stages, first to determine the base size for the next 10 years and evaluating alternative reductions in Centrex stock by creating regional warehouses or by separating business units. Subsequently, 2 storage techniques were chosen to handle the products of the 5 divisions found in Centrex: 16% of the positions will remain as a simple selective for goods exported to box level, 1% for flammable products and the remaining 83% narrow technique for storage of products of the 5 divisions hall was recommended. A new area will also be implemented in Centrex to double the picking unit, which will result in increased picking fronts and release positions in racks to implement the technique mentioned above narrow corridor. The last stage is the implementation plan, in 4 phases over the next 10 years. For each year the investments required by L'Oreal Mexico and for each phase activities and modifications to the operation necessary for the implementation of the proposed techniques mentioned are outlined. As a result of the project, a storage technique which allows an increase of at least 20% in the pallet storage capacity in selected positions. Also, the new operating model will allow a reduction of up to 25% of the projected cost per unit processed in Centrex. More information about L'Oréal Mexico on its website. More information about the project: ribas@miebach.com

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