Xavier Tholey, Global Head of Supply Chain and Industrial for NAOS Group (Bioderma, Estherderm and Etat Pur), discusses continuous improvement and innovation in supply chain. A fascinating insight into one of the leading global bio-ecological skincare & suncare brands and how great leadership can transform operations.
What are the key areas for growth that your business is focusing on for the next 2 years?
The way we create value in our supply chain is through our global expansion. We currently cover 100 different markets and are aiming to operate in 200. We run our Supply Chain Operations and corporate functions from France but through our expansion we will need to move to other countries. There are huge logistical and supply chain considerations in making products available at point of sale. The supply chain needs to be as efficient and agile as possible. The way to deliver growth is not about cost cutting, as we are a high margin business. It’s about developing a model that is responsive and flexible. I need to define a supply chain strategy to meet a variety of needs in order to improve profitability.
What are the recurring challenges you are facing as a supply chain leader and what are the new challenges?
I am in an industry that is heavily regulated. The combination of regulations and geopolitics has a direct impact on supply chain. Exporting goods presents challenges. We need to organise for growth, focus on a development plan, control finances and attract people with the right skills. We need to decrease time to market. The time between innovation and point of sales is too long. Growth of a cosmetic skincare business is centred around innovation and the capability to meet your customers on the shelf. We need to accelerate the product cycle.
In supply chain we’re embarking on high velocity sales and operations. We focus on the speed of decision making and time to market.
What recent innovations have helped to add the most value for your company?
We’re focussed on product innovation as a manufacturer. We also innovate in our ways of working. We are a small company that is agile with limited hierarchy. The way we direct is around the table where we have open conversations. The leadership style is unique in terms of concept. It’s a family owned company so I feel I have the freedom to do that. I’m not overly immersed in reporting, I can think long-term and develop new concepts – for me that’s innovation. In supply chain we’re embarking on high velocity sales and operations. We focus on the speed of decision making and time to market. All levels of employees are responsible for decision-making. That’s the dream and we’re working to implement it. At the end, all my associates will smile when they see the smiling face of our consumers!
Which technologies are going to be the game changers in supply chain and why? Which one has the most potential for your business?
Data management is key. We have a complex portfolio and the only way to remain efficient is to use a good data platform. We use SAP but it could be Oracle etc. We operate in a digital world and need to make the IoT work for us. Some of it is in the early stages of development. As you can imagine skincare is not the leading industry for using data apps. However, there are startups that diagnose your skin and formulate products. This technology will explode in the next 10 years and will revolutionise the way we do business.
As a manufacturer we need to develop a green supply chain. I believe the technology we’re implementing now will help us run without any negative environmental impact. With technology you can tackle the green supply chain challenge. Five years ago that wasn’t even part of our considerations. Now we do good for the People, good for the Planet and good for the Business Performance , the PPP ambition is becoming a reality.
Businesses will need to capture information and deliver instantly. The most responsive companies will outperform their competitors.
How and what consumer trends are influencing supply chains? How are you enhancing customer centricity?
Following on from my last answer consumers are demanding sustainable products which has a direct impact on supply chain. Demand for customisation will change the skincare business. Technology will enable autonomous shopping where you don’t have to go to the pharmacy but can order through the mirror in your bathroom. Businesses will need to capture information and deliver instantly. The most responsive companies will outperform their competitors. Time to market is a big challenge for me and my team.
What does a digital supply chain mean to you and what is the effect on your business?
The world is becoming digital – not just supply chain. There are no limitations. Companies are developing an extremely quick turnaround in terms of product creation and delivery, and their strength comes from being a digital business. Digital technology means we can formulate products based on individual consumer requirements. It is a world with no frontier. Digital is allowing complex planning, simulation and analytic techniques. You can make predictions and prepare the business for all sort of scenarios to come. The benefit for supply chain is efficiency, agility and speed. Everything starts with the consumer and the digital world allows us to interact with them in a new and improved way. This is what I am calling a “cloud of possibilities”.
What are your most recent efficiency initiatives?
In our factories we aim for world class manufacturing in terms of efficiency. We have developed a TPM (Total Productive Maintenance) solution, similar to the solution I saw at Unilever. It’s a strong approach improving the integrity of production and quality systems through the machines, equipment, processes and employees. With the appropriate techniques we can add business value and transform the speed of manufacturing. After will come the World Class Manufacturing qualification, the natural evolution of the TPM concept. We need to walk before running, we are in a permanent acceleration called Supply Chain Transformation.
How do you manage the complexity of omnichannel selling and respond to the demands of ecommerce and mobile enabled consumers?
With one of our brands, Etat Pur, we are exploring the world of ecommerce as it’s only sold online. We are continually learning and bringing solutions to our main brand. We are working with specialists with the competence to assert in this area. The power of ecommerce is often underestimated. The supply chain has to keep up with marketers who promise instant delivery of a product. We are a specialist skincare brand so don’t feel the need to keep up with companies with an infinite product portfolio selling millions of products. We have been growing by 20% year-on-year for the past five years so are not under immense pressure to transform into a digital business. We know how to manage growth. At the same time we are learning continually and making logistic and ecommerce improvements.
The other element is CRM. How do we manage the database when we have thousands of customers responding instantly to us? We are beginning to implement this fantastic tool but it is a huge task. We need to connect our consumers to our supply chain. Speed to market, velocity and agility comes from that, we call it “High Velocity Business”.
What is the vision for the future of supply chain and what are you doing to prepare for it?
Our vision is to create value every day for the business, whatever we are working on. We are expanding and are identifying relevant value drivers. We have to consider how we translate that in supply chain. It’s about incremental changes such as speed at sale and availability, not one business transformation. It starts by making quality personal, and ensuring we delight in our 100 markets in service. My directors, teams, suppliers and subcontractors all have a quality mission too. We are preparing something unique for the future.