**February 2025**: The Estée Lauder Companies has initiated its ‘Beauty Reimagined’ plan to enhance operations amid geopolitical tensions, focusing on AI integration, regionalisation, and sustainability efforts to strengthen supply chain resilience and adapt to shifting market dynamics.
In February 2025, The Estée Lauder Companies unveiled its Profit Recovery and Growth Plan (PRGP), labelled “Beauty Reimagined,” aiming to enhance its operations amid significant challenges posed by the current geopolitical climate. The supply chain, a crucial aspect of the luxury beauty group’s business, is undergoing notable transformations, as discussed by Jamal Chamariq, Senior Vice President of Global Supply Chain at Estée Lauder.
In an interview with Formes De Luxe, Chamariq highlighted how the present geopolitical landscape has introduced a multitude of challenges for the company, particularly concerning operations and supply chain dynamics. He remarked, “The supply chain is in the spotlight more than ever before. The situation is changing daily, and is a true illustration of VUCA [volatility, uncertainty, complexity, and ambiguity].” Chamariq expressed confidence in Estée Lauder’s historical ability to navigate such uncertainties with dexterity, noting that the company’s global manufacturing and fulfilment network is constructed to adapt quickly to evolving conditions.
To address these geopolitical challenges, Chamariq explained the collaborative approach taken within the company, involving cross-functional teams in business, finance, supply chain, and risk management. “We run multiple scenarios to find the right option. This is forcing us to challenge the way we think,” he stated, illustrating the proactive measures being implemented.
A significant pivot in Estée Lauder’s operations is the integration of artificial intelligence (AI) within its supply chain processes. Chamariq referenced comments made by CEO Stéphane de La Faverie during an earnings call earlier in February 2025, announcing that AI is being leveraged to bolster various activities, thereby paving the way for more strategic thought. This technology is expected to optimise internal processes and improve cross-departmental interactions.
Estée Lauder is employing a variety of advanced technologies, including AI, machine learning, and predictive analytics. These tools are aimed at enhancing demand forecasting, inventory management, and distribution effectiveness, ensuring comprehensive visibility across their supply network. The use of planning solutions like o9 is central to this strategy, which helps convert consumer insights into refined supply plans.
In an operational restructuring, Estée Lauder has redefined its geographical structure into four main regions: Emerging Markets, Americas, Mainland China, and Asia-Pacific, including travel retail. Chamariq described how the “Beauty Reimagined” initiative aims to facilitate a significant overhaul across functions and regions, promoting a streamlined organisational structure that features a single Chief Supply Chain Officer for each territory. This shift is designed to foster synergies across manufacturing, product supply, and new product launches, reducing complexity for a more agile response.
The impact of the Covid-19 pandemic on supply chain strategies cannot be understated, as Chamariq acknowledged that the experiences gained during the pandemic have ushered in an era of enhanced dual sourcing and procurement strategies to mitigate risks. He detailed how the overarching goal is to ensure that if one region faces disruptions, the operations can continue seamlessly elsewhere.
India has emerged as a particular area of interest for Estée Lauder, often touted by analysts as a burgeoning market. Chamariq commented on the increasing purchasing power within the rising middle class and mentioned, “If you can capture 5, 10 or 20% of that, that’s quite an opportunity!” He highlighted ongoing infrastructure development in India as a pivotal factor contributing to growth prospects.
The evolving landscape of inventory management plays a crucial role in Estée Lauder’s regionalisation strategy, where proximity to market demand is increasingly prioritised. Chamariq underscored the rapid shape-shifting of consumer trends that can dramatically alter expected order volumes. In response, he emphasised that regional manufacturing can add value even if it entails slightly higher costs.
Sustainability initiatives are integral to the company’s approach, with Chamariq elaborating on how manufacturing processes are designed to be more environmentally responsible. Projects include the installation of solar panels and the creation of closed-loop water systems in manufacturing sites, such as the one planned at Oevel, Belgium. The company aims to minimise transportation emissions by sourcing locally and optimising distribution channels with sustainability in mind.
Estée Lauder’s regionalisation strategy also extends to improving efficiencies in its transport logistics. Chamariq noted the increased reliance on rail transport over ocean or air freight due to its sustainability benefits, as well as prioritising vessels that utilise biofuels.
Overall, as Chamariq stated, “Volatility is the new normal,” reflecting the contemporary challenges and opportunities faced by the luxury beauty industry. This comprehensive approach to supply chain management positions Estée Lauder to navigate current uncertainties while capitalising on regional markets and innovations in technology.
Source: Noah Wire Services
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