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2. Creator of handmade cosmetics Founded by Mark Constantine
and Liz Weir Headquartered in Poole, Dorset United Kingdom
Originally named Cosmetics-To-Go In 1990s Renamed as LUSH In 1995
LUSH defined as fresh & green Brought to North America by Mark
and Karen Wolverton in 1996 COMPANY BACKGROUND
3. To determine the forecasting policies in place by the
company. To gain in depth knowledge of the companies production
planning To gain in depth knowledge of the companys procurement
strategy OBJECTIVES
4. Store manager made order based on previous year sales data
Reviewed orders bi-weekly Forecast could be not accurate which led
to: Lost of sales Lower margin Low-quality customer service DEMAND
FORECASTING Initially Currently Software solution for automation
and streamlining Prophix software Leverage purchasing patterns
Shift from Ordering Scared to Ordering Smart Results: Reduced
on-hand inventory by 7 days Revenues growth by 15%
5. Microsoft AX - all areas of business access the same data
(retail, finance, production) PRODUCTION PLANNING Lush utilize
software for MRP (material requirement planning) for all aspects of
production: Planning Purchasing Inventory management Benefit all
departments across the country has access to the same information
Lush is planning to change ERP (Enterprise Resource Planning)
software:
6. PRODUCTION PLANNING Still have surprises Potential
production bottlenecks: Labor capacity Per shift production
capacity Material capacity 330,000 660,000 December 30th January
3d
7. Just in Time Mentality - have the materials for production
at the right time, at the right place & in the right quantity.
Lush produces handmade cosmetic products which are 100% vegetarian,
65% of them are preservative free. Buys fresh products from
different vendors all around the world. Things ranging from citric
acid and bicarbonates. Residual muds from Morocco, SexBomb flowers
from Italy PROCUREMENT
8. LUSH does not store excess of raw materials in hand at the
ware house: Limited space that will reduce the efficiency and will
take a lot of time to go through it. Strict freshness policy to
provide fresh products to the customers. PROCUREMENT STRATEGY
9. Production Manager communicates with the Buying Manager
Allocation of raw materials to be used for production Buying
Manager places the order according to the requirements produced by
the Forecasting Manager Lush calls its supply chain approach
Creative Buying where a business looks beyond lowest price and
bottom line, and instead buys the best, safest and most suitable
products in accordance with their ethics. PROCUREMENT PROCESS
CREATIVE BUYING
10. Ecological Safety Measure: Less footprint on Roads, Rails
& Airways Waterways: Slow method and usually takes 60-90 days.
Precaution: Forecasting for a period of 3 months ahead of time. (
In case of any change in demand or custom issues) Safety lock of
100-150% in case of emergency Alternative vendors to provide at a
short notice complying with their Animal Testing Regulations RISK
& SAFETY MEASURE
12. EDI Systems: Electronic data interchange (EDI) is an
electronic communication method that provides standards for
exchanging data via any electronic means between two different
companies, even in two different countries. They can electronically
exchange documents (such as purchase orders, invoices, shipping
notices, and many others). TMS: A Transportation Management System
(TMS) is a subset of Supply Chain Management (SCM) software focused
on transport logistics. TMS systems facilitate interactions between
an Order Management System (OMS) and the Warehouse or Distribution
Center (DC). A compounder is used to blend the raw flowers into
powder form for the production of soaps and shampoos. Electronic
Lift Truck: For transferring of materials and finished products
from their respected sites. TECHNOLOGY
13. Levels maintained daily No multiple locations Ideally
100-150% safety stock on hand QAD/MFG inventory management software
Performs monthly inventory counts Strives for 75% min. accurate
inventory count Does not follow inventory management index
INVENTORY MANAGEMENT
14. Lushs primary mode of transportation for receipt of raw
materials is air and sea Lush uses intermodal transportation
services Motor Carrier is used for delivery from
factories/warehouses to retail stores Lush uses a mixture of Truck
Load (T.L) and Less than Truck Load (L.T.L) Lush uses a
Transportation Management Systems Software Outsourcing to third
party logistics is utilized for domestic and U.S deliveries
TRANSPORTATION
15. Backorders Perfect Order Measurement Inventory measurement
PERFORMANCE MEASUREMENT
16. Two distribution centers Bins and tanks Trays and crates
Racks Gloves and Nose guards Safety precautions STORAGE AND
MATERIAL HANDLING
17. Serves customers through its stores and website Customers
can return the product by contacting the customer service number
Communicate with the company through the publication of Lush Times
CUSTOMER SERVICE
18. SUPPLY CHAIN SINCE PAST 10 YEARS Collaboration with farmers
in sourcing raw materials such as flowers and coffee More
Distribution centers Sustainability reuse of recycled organic
materials and plastics Leverage software
19. RECOMMENDATION Mixture of large and small trucks in their
fleet. This will ensure that large trucks are not being used for
delivery of only a few items which will result in cost savings on
fuel. Invest more on thick plastic bins that can hold the powdery
materials during winter time and not dry up. Since dry powdered
results to more inventory waste and waste of time to produce.
Increase of stores for better reach of consumers. Lush has one
major store at Eaton center.
20. WHY IS SUPPLY CHAIN IMPORTANT TO YOUR BUSINESS? By Nick:
Ballistic Production Manager for LUSH