Short Case

Flexibility helps JIT at L’Oréal

L’Oréal cosmetics is now the world’s largest toiletries and cosmetics group,
with a presence in over 140 different countries. In the UK, the 45 000 square
metre purpose-built facility in mid-Wales produces 1300 product types in a
spotlessly clean environment, which is akin to a pharmaceutical plant in terms
of hygiene, safety and quality. The plant has 55 production lines and 45
different production processes, and the manufacturing systems employed are
of a flexibility that allows them to run each of the 1300 product types every
two months – that means over 150 different products each week. But the plant
was not always as flexible as this. It has been forced to enhance its flexibility
by the requirement to ship over 80 million items each year. The sheer logistics
involved in purchasing, producing, storing and distributing the volume and
variety of goods has led to its current focus on introducing JIT principles into
the manufacturing process.

To help achieve its drive for flexibility and for JIT production, L’Oréal
organized the site into three production centres, each autonomous and
focused within technical families of products. Their processes and production
lines are then further focused within product sub-divisions. Responsible for all
the activities within his area, from pre-weighing to dispatch, is the Production
Centre Manager, whose role also encompasses staff development, training
and motivation. Within the focused production centres, improvement groups
have been working on improving shop-floor flexibility, quality and efficiency.
One of the projects reduced the setup times on the line which produces hair
colourants from 2.5 hours to only eight minutes. These new changeover times
mean that the company can now justify even smaller batches, and may give
the company the flexibility to meet market needs just-in-time. Prior to the
change in setup time, batch size was 30 000 units; now batches as small as
2000– 3000 units can be produced cost-effectively.

Questions
1 What did L’Oréal do to help it organize the process of setup reduction?
2 What do you think L’Oréal gained from doing each of these things?
3 If we could halve all changeover times in the factory, what effect would
this have on inventory?