Estée Lauder has implemented a global integrated business planning process, utilizing artificial intelligence to enhance inventory forecast accuracy and optimize supply chain operations.
AI-Driven Forecasting for Enhanced Inventory Management
In a strategic move to refine inventory management, Estée Lauder has introduced an integrated business planning process on a global scale. This initiative is set to bolster inventory accuracy, as confirmed by company executives during a recent earnings call. By incorporating advanced planning technologies, including artificial intelligence (AI), Estée Lauder aims to statistically refine forecast accuracy and more effectively position or deploy inventory.
Strategic Supply Chain Optimization
The integrated business planning process is part of Estée Lauder’s broader objective to achieve supply chain and inventory efficiencies. This process is supported by various tools that the company has invested in over recent years, as explained by EVP and CFO Tracey Travis. These operational enhancements are designed to not only improve forecast accuracy but also to integrate the commercial drivers that underpin the company’s business.
In response to supply chain disruptions and the subsequent overproduction of inventory in 2022, Estée Lauder, like many retailers, is turning to technology solutions such as AI to refine inventory planning and demand forecasts. This adoption is a key component of the company’s efforts to address the challenges of excess inventory.
The cosmetics giant’s commitment to supply chain optimization is further evidenced by the appointment of Quentin Roach as chief procurement officer in September 2023, tasked with managing strategic supplier relationships. Additionally, Estée Lauder is actively realigning shipping schedules and addressing reduced plant capacity to streamline operations, as highlighted by President and CEO Fabrizio Freda during the earnings call.
