Louis Vuitton New Supply Chain
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Transcript of Louis Vuitton New Supply Chain
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LOUIS LOUIS VUITTONVUITTON
Jean Charles HodouinJean Charles HodouinLIM New York 2012LIM New York 2012
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Company Company BackgroundBackground•Paris,1854Paris,1854•Trunks, Luggage, Trunks, Luggage, BagsBags•LV MonogramsLV Monograms•Tradition, InnovationTradition, Innovation•1977: 2 Stores.$10m1977: 2 Stores.$10m
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BackgroundBackground
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• 1983 – Louis Vuitton Cup
• 1987 – LVMH is born• 1988 – Profits +49%
• 1989 – 130 stores worldwide
BackgroundBackground
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BackgroundBackground
1990 – Yves Carcelle, President LV
1998 – Marc Jacobs, Artistic Director
2003 – Multi color monogram
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OperationsOperations
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MarketingMarketing
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MarketingMarketing
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MarketingMarketing
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MarketingMarketing
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Office Office ManagementManagement
“Developing knowledge and versatility, recognizing creativity, encouraging independence and a
continual focus on enhancing performance are all integral to our
training policy.” ~ LV’s HR 2011
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Financial Financial ManagementManagement
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Legal Legal ManagementManagement
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Old Supply ChainOld Supply Chain Each factory - 250 employees
Each specialized in one production step
20 to 30 craftsman = 1 Louis Vuitton tote bag
Hard to transfer employees
Difficult to produce more
Couldn’t cover the high-demand = Lost Sales
Factories not flexible
The supply chain process - inefficient and slow
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New Supply New Supply ChainChain
2005 –McKinsey & Co
New products every 6 weeks
New distribution center global distribution
center outside Paris 6 regional
distribution centers around the world
These 6 distribute the products to the stores
Pegase
Carmakers Manufacturing process – lean production
Zero-defect policy
13 factories that produce accessories
Employees are less specialized
Organized in team formats
Manufacturing Process
Distribution Process
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New Supply New Supply ChainChain
New store and distribution strategy
•Keepall Reorganization:
•Managers/Feedback
•Right products in the right stores
•2 Teams – Stock room/Sales Floor
Maintain brand identity + high quality
Reduced returns 50%
Increased sales, increased stock
Maintaining10% annual growth for the next several years
Overall ResultsDistribution Process
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Technology in Operations: E-learning system EKP
Training: soft skills, system usage, anti-counterfeiting-training, internally and externally sourced coursework
Cost-effective, offers educational diversity and flexibility
Easy accessible and user-friendly
TechnologyTechnology
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LANDesk Management Suite high PC security
Maintain on high level of performance
PC systems up-to-date and well-managed
Shortens security patch development times, reduces man-hours, eliminates interruption, reduced network traffic
TechnologyTechnology
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Product Lifecycle Management Widely acknowledged in apparel, fashion,
and accessory industry
End-to-end footprint solution
PDM, merchandise, supplier collaboration, & performance-management
Reduction of product failure risks, material costs, process friction & lead times
TechnologyTechnology
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Technology in Supply Chain I2 solution suite
Closing the gap between demand and supply
Demand planning with forecasting processes & statistical techniques
Improved forecast accuracy
Increased velocity
TechnologyTechnology
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PartnersPartners
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Services Integrated modern system which also
connect with the retail system (POS)
Tool of flexible management and advanced administrative information
Accommodate management of multi-attribute items
JD EdwardsJD Edwards
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Services Integrated network including US, Canada
and Mexico
Lowest cost
Quality
Sustainability
DB SchenkerDB Schenker
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Services Keep the right mix of product in stock
Hottest and fast-selling items
Rush orders
Web-based FedEx App
FedExFedEx
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Services One stop-source
Customized boxes
ISO 9001
E-truck routing system
LandsbergLandsberg
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Services Fundamental overhaul
New factory format (Pegase)
Manufacturing process more flexible
Ship fresh collection every six weeks
Global distribution hub outside Paris
McKinsey & Co.McKinsey & Co.
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"Behind the creative magic of Louis Vuitton is an extremely
efficient supply chain” Quality Management Systems, J.I.T. and
fulfillment services
Variety of value-added services including monitoring inventory levels
Support and technology to do so
Best PartnersBest Partners
Best Practices
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LOUIS LOUIS VUITTONVUITTON