Term Paper

Course Code: MIS 404

Course Title: Supply Chain Management
Topic: Addressing Supply Chain Challenges with I4.0 Technologies: A
Case of “Sephora”
Prepared by:

Serial Number Student’s Name Class Roll

01 Anisa Labiba 029-15-006
02 Arfina Khandokar Aranya 029-15-026
03 Lawrence Aumlan Biswas 029-15-082
04 Mubassherul Kabir 029-15-086
05 Ali Akbar Ovi 029-15-098

Batch Number : 15th

Program Name : BBA
Name of Faculty : Business Studies
Name of Department : Management Information Systems
Name of University : University of Dhaka
Prepared for:
Nahida Sultana
Lecturer
Department of MIS
Faculty of Business Studies
University of Dhaka

Date of Submission: 7th December,2023

 Letter of Transmittal
7th December, 2023
Nahida Sultana
Lecturer
Department of Management Information Systems
Faculty of Business Studies
University of Dhaka

Subject: Submission of term paper on case study solution.

Dear Madam,
We have been assigned to complete a term paper on Addressing Supply Chain Challenges with
I4.0 Technologies: A Case of Sephora. We have tried our best to prepare this to be as
informative and relevant as possible.

To prepare this term paper, we have reviewed some books, journals and downloaded some
information from Internet. This term paper has given us a great opportunity to understand the
influence of I4.0 on supply chain management of business. We are grateful to our course teacher
for this chance.

We will be available for further query and clarification regarding this report whenever necessary.
Insipid of our hard affords if there are any mistake or shortcoming in this term paper we offer our
apology for that.

We, therefore, pray and hope that you would kindly accept our term paper and oblige thereby.

Sincerely yours,

Team Eternals
ID: 029-15-006; 029-15-026; 029-15-082; 029-15-086; 029-15-098
Batch: 15th
Program name: BBA
Department of Management Information Systems
Faculty of Business Studies
University of Dhaka
 Acknowledgement
We are over helmed in all humbleness and gratefulness to acknowledge our depth to all those
who have helped us to put these ideas, well above the level of simplicity and into something
concrete.

We would like to express our special thanks of gratitude to our teacher who gave us the golden
opportunity to do this wonderful project, which also helped us in doing a lot of Research and we
came to know about so many new things. We are really thankful to him.

Executive Summary
This paper aims to investigate the potential of Industry 4.0 (I4.0) technologies in addressing
supply chain challenges, with a specific focus on the case of Sephora. The absence of real-time
visibility and transparency in supply chain processes can lead to inefficiencies, delays, and
increased costs for companies like Sephora. In order to overcome this issue, this paper proposes
the use of I4.0 technologies such as the Internet of Things (IoT), artificial intelligence (AI), and
blockchain to create a more interconnected and intelligent supply chain.
The paper delves into how IoT sensors can be utilized to track product movement and condition,
providing real-time data on inventory levels, location, and environmental conditions. Moreover,
it explores how AI can analyze data to detect patterns, forecast demand, and optimize production
and distribution processes. Additionally, the paper examines how blockchain technology can
establish a secure and transparent digital ledger for tracking and verifying transactions across the
supply chain.
By implementing these I4.0 technologies, Sephora can establish a more agile, responsive, and
transparent supply chain that can better meet customer demands and adapt to changing market
conditions.
Contents
Introduction......................................................................................................................................1

Origin of the report......................................................................................................................1

Methodology................................................................................................................................1

Key Parts of the report.................................................................................................................2

Objectives of the report...............................................................................................................2

Broad Objectives.........................................................................................................................3

Specific Objectives......................................................................................................................3

Scope............................................................................................................................................4

Limitations...................................................................................................................................4

Overview of Sephora.......................................................................................................................5

Supply Chain Network of Sephora..................................................................................................6

Sourcing.......................................................................................................................................6

Manufacturing..............................................................................................................................7

Distribution..................................................................................................................................7

Retail channels.............................................................................................................................7

Supply Chain Issues of Sephora......................................................................................................9

Inventory Management: Striking a Delicate Balance..................................................................9

 Product Shortages and Stock outs:....................................................................................9

 Inaccurate Demand Forecasting:.......................................................................................9

Rising Transportation Costs: A Strain on Profitability..............................................................10

 Fuel Price Volatility:.......................................................................................................10

 Labor Shortages and Port Congestion:............................................................................10

Ethical Sourcing Concerns: A Moral Obligation.......................................................................10

  Labor Practices in Developing Countries.......................................................................10

 Supplier Compliance:......................................................................................................11

Solution of supply chain using Industry 4.0 technologies.............................................................12

Solution to Inventory management: Striking a Delicate Balance..............................................12

Solution to Rising Transportation Costs....................................................................................12

Solution to Ethical Sourcing Concerns......................................................................................12

Conclusion.....................................................................................................................................13

References......................................................................................................................................13
Introduction
Origin of the report

The origin of the reports on enhancing supply chain management in the context of Industry I4.0
can be inferred from the provided abstracts and contexts:

 The reports are likely the result of research conducted by experts in the field of supply
chain management and Industry I4.0 technologies.
 The reports may have been published in academic journals or presented at conferences,
indicating a scholarly origin.
 It is possible that the reports were commissioned by organizations or institutions
interested in understanding the potential applications and challenges of Industry I4.0 in
supply chain management.
 The reports may have been motivated by the need to address the impact of megatrends on
supply chains and explore ways to maintain competitiveness in the rapidly evolving
digital landscape.

Overall, the reports are likely the result of academic research and industry interest in leveraging
Industry I4.0 technologies to optimize supply chain processes.

Methodology
 The methodology used in the reports includes focus group interviews and discussions
with participants from different industries, roles, and research centers to gather diverse
perspectives and avoid biased responses. Moderators were selected based on their
knowledge and ability to create an open and inclusive environment for discussion. The
focus groups were organized in multiple sessions, with specific protocols developed for
sampling participants, group composition, and research objectives.
 The focus group interviews followed a structured approach with questions designed to
engage participants and guide the discussion towards comparable results across different
groups.
 The reports employ focus group research as a qualitative approach to gain a deeper
understanding of supply chain capabilities and technologies, and to inform future
decision-making.
 The use of cloud-based computer systems and the Internet of Things are mentioned as
technologies relevant to supply chain management.

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Key Parts of the report
 The reports utilize focus group interviews and discussions with participants from various
industries and research centers to gather diverse perspectives on supply chain capabilities
and technologies.
 The methodology involves structured focus group sessions with specific protocols for
participant sampling, group composition, and research objectives.
 Cloud-based computer systems and the Internet of Things (IoT) are mentioned as relevant
technologies for supply chain management.
 The reports aim to provide a comprehensive understanding of supply chain requirements
and capabilities to address emerging challenges.
 The analysis process involves transforming initial concepts and quotations into second-
order themes and abstracting them into aggregate dimensions.
 Multiple sources, including previous literature, discussions among researchers, and
validation by expert participants, are used to confirm emerging themes and technology
applications.

Objectives of the report

 The objectives of the reports include providing insights into the need for optimizing
information and product flows in supply chains to enable fast reconfiguration in response
to unexpected events.
 The reports aim to highlight the role of data management systems, big data analytics, and
AI in supporting supply chain resilience and risk management.
 The focus is on the potential of IoT, communication infrastructure, and location
technologies in detecting real-time disruptions and optimizing logistics and
manufacturing operations.
 The reports aim to contribute to understanding the impact of megatrends on supply chains
and the adoption of Industry I4.0 technologies to cope with these trends.
 The focus is on identifying specific supply chain capabilities and I4.0 technologies to
address megatrends and enhance supply chain competitiveness.
 The reports explore the use of digital technologies, such as 3D printing and cloud-based
computer systems, to support urban-centered supply chains and enable personalized
production and flexible management.
 The reports also discuss the benefits and challenges of digitizing supply chain and
procurement processes, emphasizing the need for disciplined planning and committed
leadership for successful implementation.

2
Broad Objectives
 The broad objectives of the reports include understanding and exploring the capabilities
and technologies needed to enhance supply chain management in the context of Industry
I4.0.
 The reports aim to identify and discuss the potential applications of Industry I4.0
technologies, such as cloud-based computer systems, big data analytics, and IoT, in
optimizing supply chain processes and enabling fast reconfiguration in response to
unexpected events.
 The focus is on the role of digital technologies, including 3D printing and cloud-based
systems, in transforming supply chains and enabling personalized production and flexible
management.
 The reports also aim to provide insights into the benefits and challenges of digitizing
supply chain and procurement processes, emphasizing the need for disciplined planning
and committed leadership for successful implementation.
 Additionally, the reports contribute to understanding the impact of megatrends on supply
chains and the adoption of Industry I4.0 technologies to address these trends and maintain
supply chain competitiveness.

Specific Objectives
 The specific objectives of the reports are to explore the need for optimizing information
and product flows in supply chains to enable fast reconfiguration in response to
unexpected events.
 The reports aim to highlight the role of data management systems, big data analytics, and
AI in supporting supply chain resilience and risk management.
 The focus is on the potential of IoT, communication infrastructure, and location
technologies in detecting real-time disruptions and optimizing logistics and
manufacturing operations.
 The reports aim to contribute to understanding the impact of megatrends on supply chains
and the adoption of Industry I4.0 technologies to cope with these trends.
 The focus is on identifying specific supply chain capabilities and I4.0 technologies to
address megatrends and enhance supply chain competitiveness.
 The reports explore the use of digital technologies, such as 3D printing and cloud-based
computer systems, to support urban-centered supply chains and enable personalized
production and flexible management.

3
  The reports also discuss the benefits and challenges of digitizing supply chain and
procurement processes, emphasizing the need for disciplined planning and committed
leadership for successful implementation.

Scope
 The scope of the reports is to explore the capabilities and technologies needed to enhance
supply chain management in the context of Industry I4.0.
 The reports aim to identify and discuss the potential applications of Industry I4.0
technologies, such as cloud-based computer systems, big data analytics, and IoT, in
optimizing supply chain processes and enabling fast reconfiguration in response to
unexpected events.
 The focus is on the role of digital technologies, including 3D printing and cloud-based
systems, in transforming supply chains and enabling personalized production and flexible
management.
 The reports also aim to provide insights into the benefits and challenges of digitizing
supply chain and procurement processes, emphasizing the need for disciplined planning
and committed leadership for successful implementation.
 Additionally, the reports contribute to understanding the impact of megatrends on supply
chains and the adoption of Industry I4.0 technologies to address these trends and maintain
supply chain competitiveness.

Limitations
 The limitations of the reports are not explicitly mentioned in the provided abstracts and
contexts.
 However, it can be inferred that potential limitations may include the challenges
associated with implementing and integrating Industry I4.0 technologies into existing
supply chain systems, such as the need for significant investments in infrastructure and
technology upgrades.
 Another potential limitation could be the complexity of managing and analyzing large
volumes of data generated by IoT devices and other digital technologies, requiring robust
data management systems and skilled personnel.
 Additionally, the reports may not provide a comprehensive analysis of all possible
megatrends and their specific impacts on supply chains, as the focus seems to be on
identifying key trends and technologies.

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  It is also important to note that the limitations of the reports may vary depending on the
specific research methodologies and approaches used in each study, which are not
provided in the given abstracts and contexts.

Overview of Sephora
Sephora is a global brand that has been giving excellence and restorative items to more than 50
years. Settled in Paris, France. It has areas of strength of an in the worldwide magnificence
industry and works through an inventory network that traverser is across the world. It operates
over 2,700 stores in 35 countries worldwide, with an expanding base of over 500 stores across
the Americas, and a world-class e-commerce site with the motive of serving people nationwide
and satisfying their needs with a lots of variety of product including makeup and skincare
products. Sephora is a beauty and personal care store. The business offers cosmetics for makeup,
lipstick, skincare brands body care and hair products, lip care for women. The company manages
customers through stores and online (Sephora, 2018). Sephora Corporation needs analysis advice
and results from product management professionals to studio the brand and use the best products.

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Supply Chain Network of Sephora
This paper will investigate the store network organization of Sephora, including obtaining,
assembling, conveyance, and retail channels.

Sourcing

Sephora sources its unrefined components and fixings from providers situated in various nations
like France, Italy and Japan. The organisation has executed a merchant the board program to
successfully deal with it providers. Sephora contacts normal reviews to guarantee that its
providers stick to morale and manageable practices in their activities. The organisation likewise
steams up with its providers to foster new items and improve its production network processes.

6
Manufacturing

Sephora works with a few agreement makers situated in various nations like US, France and
China to create its Magnificence items. Organisation of those rigid quality control guidelines in it
as assembling cycles to guarantee that its item satisfies its image guidelines. It has carried out a
maintainability program to limit its ecological effect by diminishing waste and discharge in
assembling process.

Distribution

Sephora conveyance Network incorporates a few stockrooms situated in various nations like the
US France and Japan. The organisation utilise a unified stock framework to deal with its
dissemination empowering it to improve its stock levels across its retail channel stock. Sephora
has executed a direct to store convince model to guarantee its item arrive at its retail location on
time. Furthermore, the organization has carried out an Omni channel appropriation model for
meeting clients to buy item on the website and get them available or through home conveyance.

Retail channels

Sephora words to both physical and online radio channels. The organisation has in excess of
2600 stores across the world with this solid presents in North America Europe and Asia. Sephora
has carried out is stored plan take me to upgrade client experience in advance it's in his
personality. The organisation likewise offers a devotion programmed to boost claims to make
rehash buys. What's more Sephora has a web base store that empowers clients to buy items from
their cell phones or work areas.

All in all, the inventory network organisation of Sephora is a perplexing framework that
incorporates obtaining assembling convenience and retail channels. The organisation has carried
out if you drive to deal with its providers of rate eight assembling process limit its natural effect
and improve client experience. Sephora’s prosperity is a consequence Office capacity to adjust to
changing business sector patterns, influence cutting-edge innovation and keep areas of strength
for a character.

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During the time spent picking the brand, Sephora offices' separate delegates team up to focus on
each and every thing and fixing, whether it is an item or a help, and decide whether it is really
great for the clients or not. Finance, Advertising, Innovative work, Planned operations, Lawful
and Quality Control are the reaction jobs (Sephora Callings, 2018). There is a Sephora store
network system which is represented in the graph. Sephora has a yearly deal occasion in the
spring. Steadfast customers plan their takes, and brands sold by the retailer advance it like
Amazon's Superb Day or Nordstrom's Commemoration Deal. In any case, this year, the deal had
an importance in manners brands and customers might very well won't ever be aware. Of having
the greatest offer of the year in April implied Sephora's production network was flexed and
prepared for flooding volume when chiefs briefly shut down all stores in Spring, about five
weeks before the advancement. When the Covid pandemic moved most of retail business on the
web, a few retailers regretted that they can deal with that sort of web based business volume the
caring they find in top season yet just with long stretches of prep.

Supply Chain Issues of Sephora

Sephora, a global beauty retail giant, has established itself as a pioneer in the industry, renowned
for its diverse product offerings, immersive shopping experiences, and commitment to
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innovation. However, the company's journey to success has not been without its challenges. In
recent years, Sephora has faced a multitude of supply chain disruptions, highlighting the
complexities and vulnerabilities of global commerce. This essay delves into the key supply chain
issues faced by Sephora, examining their impact on the company's operations and exploring the
strategies implemented to mitigate these challenges.

Inventory Management: Striking a Delicate Balance

At the heart of Sephora's supply chain lies the intricate task of inventory management. The
company's vast product range, encompassing over 13,000 brands and 130,000 products, coupled
with its global presence and diverse customer base, poses a unique challenge in maintaining
optimal inventory levels.

 Product Shortages and Stock outs: Sephora has experienced an increase in product
shortages and stock outs, leading to customer frustration and potential revenue losses.

 Inaccurate Demand Forecasting: Inaccurate demand forecasting has contributed to excess

inventory, tying up capital and increasing storage costs.

Rising Transportation Costs: A Strain on Profitability

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The pandemic-induced disruptions in global shipping have had a significant impact on Sephora's
supply chain operations, particularly in the form of rising transportation costs.

 Fuel Price Volatility: Fuel price volatility has led to substantial increases in transportation
expenses, impacting Sephora's bottom line.

 Labor Shortages and Port Congestion: Labor shortages and port congestion have further
exacerbated transportation costs, slowing down product movement and increasing lead
times.

Ethical Sourcing Concerns: A Moral Obligation

Beyond the logistical challenges, Sephora has also faced ethical concerns regarding labor
practices within its supply chain.

 Labor Practices in Developing Countries: Sephora has been criticized for sourcing raw
materials and manufacturing products from countries with questionable labor practices,
such as forced labor and poor working conditions.

 Supplier Compliance: Ensuring compliance with ethical sourcing standards across a

diverse network of suppliers has proven to be a complex and ongoing challenge.

Sephora's journey through the labyrinth of supply chain disruptions serves as a testament to the
company's resilience, adaptability, and commitment to continuous improvement. By embracing
technological advancements, fostering stronger partnerships, and diversifying its supply chain,
Sephora has positioned itself to navigate future disruptions and maintain its position as a leader
in the beauty retail industry.

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Solution of supply chain using Industry 4.0 technologies
Businesses have managed to get beyond these obstacles, mostly by making supply chain
planning a top priority and incorporating Industry 4.0 technologies into their workflows. Industry
4.0 is always changing, and while some businesses might be reluctant to adopt these
technologies, others are starting to recognize their potential. Here are a few ways Sephora can
enhance its supply chain by utilizing Industry 4.0 technologies:

Solution to Inventory management: Striking a Delicate Balance

RFID is swiftly taking over as the preferred method for streamlining inventory management and
organization. RFID tags or chips that can be applied to goods as they arrive for transportation use
radiofrequency technology, which transfers data. The internal memory of the tag is updated as
the objects pass through the various procedures, and it can be uploaded via electromagnetic
signals to the warehouse management system. After the data is uploaded, analysis can be done to
track what enters and exits the building, maintain inventory levels, and better understand the
movement of items. As a result, Sephora can effectively manage its inventory.

Solution to Rising Transportation Costs

Even if Sephora is unable to completely control fuel price fluctuations, it can work to lessen their
impact through various means. Since its inception in the 1990s, predictive maintenance has
undergone changes. The process of employing software and tools for data analysis to more
accurately forecast when components or equipment may break down is known as predictive
maintenance. Rather to responding to the failure after it has already occurred, the aim is to
replace or repair components before the anticipated failure occurs. By doing this, the machines'
lifespan is maximized and parts are not replaced too soon. Additionally, it avoids needless
downtime brought on by catastrophic failures. Therefore, by balancing with other enhancements,
Sephora might lessen its limitation caused by rising fuel prices.

Solution to Ethical Sourcing Concerns

Accurately tracking an item's location while it goes through the supply chain is known as real-
time tracking. An IoT-enabled tracker transfers data to a server as the product is moved from
place to place so that it can be reviewed as often as necessary. Time-tracking versus preset goals
in terms of days, hours, or minutes is another option for the tracking. Customers can be informed
about anticipated delays and transportation concerns thanks to this data transparency. Sephora
has easy access to track shipments of inventory. It can also take action if it discovers suppliers
who are abusing their workers.

Efficiency, visibility, and reactivity in the supply chain can all be greatly improved by
implementing Industry 4.0 technologies. Sephora may effectively surmount its obstacles by
integrating industry 4.0 technologies into its supply chain.

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Conclusion
All in all, Sephora does a good job as a beauty company because it achieves its main goal by allo
wing customers to try products before buying in stores and using virtual artists to buy online, whi
ch is a good idea. With 750 stores in the 21st century, Sephora has a great online website to help
all customers using informative videos, images, and beautiful tutorials. According to the survey,
Sephora employees are happy to work at Sephora due to the many advantages. Additionally, usin
g Beauty Pass is a great way to increase and maintain customer loyalty as it encourages customer
s to earn points and receive free gifts. However, the products that Sephora sells are very expensiv
e and not all customers can afford to buy them, which is one of Sephora's weaknesses. Sephora w
ill also include cheaper products and men's care products such as shavers, deodorant,
and perfume in order to target more customers or other stores.

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