Beauty 4.0: The innovation and digitisation of Coty’s supply chain

Beauty 4.0: The innovation and digitisation of Coty’s supply chain

The beauty industry has grown exponentially. With cosmetics once worn solely by wealthy individuals or those on screen, the $445bn industry has seen established businesses overhaul their outdated corporate models amidst a diverse demographic landscape, intensifying competition, changing consumer tastes and the way beauty products are bought today. Established over a century ago, beauty product manufacturer Coty has been part of this revolution, and is witnessing the effects of digitisation on a global scale, with increased demands for products which are highly innovative and meet specific consumer demands at each market.

“Digital is disrupting the beauty industry in a big way. Buying behavior has changed dramatically and consumers want new products faster than before,” observes Arya Gupta, Coty’s Procurement Director of Global Chemicals & Innovation. With its worldwide manufacturing operations and R&D capabilities, the business is undergoing a significant transformational journey, guaranteeing exceptional and innovative product offerings in the Beauty space which are fully designed with consumers in mind.

“We believe in the freedom of self-expression. It’s about being who you want to be. We want to empower this,” explains Gupta.

“We want to make sure that we live this every day. We want to be inventive and create possibilities for consumers. The concepts of diversity, individuality and authenticity are central to this.”

Priding itself not only on its agility and commitment to adapt to the pace of change, Coty has expanded beyond its core markets in Europe, North America and Brazil, China and Asia-Pacific, gaining approximately US$9bn in revenue in 2017. Such is its success, it aims to further cement its presence as a leading player within the beauty industry worldwide.

Own it. Drive it

Spread across the Americas, the EU and APAC, Coty’s mission to remain a key player and create long-term shareholder value has seen it retain its unique culture, which Gupta notes with immense pride. Shaped by its core values, Coty’s business spirit of entrepreneurship has seen its lean, diverse organisation become encouraged to not only share a passion for beauty, but bring different solutions to the table to the delight of its consumer base.

“Our culture is a key differentiator for us, and a good example is our ‘Own it. Drive it mentality’”, continues Gupta. “This sets us apart from our competitors as we approach every business decision with the mind-set that it is our own company and money in which we are investing.”

“Following two mega mergers and acquisitions with Procter and Gamble and Hypermarcas, we began to re-define ourselves while embarking on this massive transformational journey. Our purpose, beliefs, charter and corporate identity are the very heart of who we are at Coty,” he says.

Supplier strengths

Coty’s ‘Own it, drive it’ mantra has seen the business’s global category procurement team become an essential bridge between the business and the global supplier base.

“Mapping our business requirements with what our supply base can deliver has enabled us to provide innovative solutions and unique ways of approaching business problems,” observes Gupta.

“We build strong partnerships with marketing and research and development teams at Coty to get an in-depth understanding of what the business needs. With this knowledge, we map it with our expertise on the company’s supply base – from our Core supplier partners to strategic players (and their particular goals and drivers), to trends in innovation and shifting business models,” he adds. “The entire effort is to ensure that our action supports our overarching business objectives and realise the company’s broader aspirations.”

Responsible for leading the transformation of Coty’s strategic sourcing destinations for chemical ingredients in Asia, Gupta has not only driven, but as part of a very lean and strong global category team, works to continuously strengthen Coty’s ambitions to achieve top line growth and bottom line profitability, achieving exceptional results sustainably. Fully exemplifying best-in-class category procurement for Chemical ingredients, the team is reinforcing and securing significant value to the business and its operations.

“This is particularly impactful for a fast-growing organisation like Coty, where speed to market is key,” says Gupta.

Technological investment

Throughout its transformation journey, Coty has invested in overhauling its traditional processes and implemented best-in-class, cloud-based point solutions and custom-built systems. The use of value engineering within its procurement tools has also enabled the business to cater to the growing demands of its consumers, make quick, informed decisions within the development of new products and scale up its sourcing and procurement capabilities in alignment with company growth.

“Technology and automation are supporting us in bringing an even deeper market insight from a category sourcing excellence point of view. It is helping us in Supplier Relationship management (SRM) through precise segmentation, identification and definition of the Core,” notes Gupta. “Also, it lets us obtain a real-time view across all our business lines, functional areas and endeavors around the globe to be able to connect the dots and make timely recommendations.”

“Additionally, it improves the Procure to Pay process especially measurement of procurement results and risk management,” he says. “To all of that, when you add excellence in execution from a high-octane team – it translates to ‘being brave and going beyond’ – a highly potent combination for the business.”

Increased consumer awareness

The rise of digital tools and technologies leading to increased consumer awareness has led suppliers, consumers and stakeholders to look closely at ways in which raw materials, ingredients and chemicals are routinely sourced by companies in the manufacturing of new products.

Filtering into Coty’s values, the business is continually looking at new, innovative ways to increase its sustainable focus across its operations. To this effect, it has signed the Global Compact United Nations (UNGC) initiative to support the 10 principles surrounding human rights, labour, the environment, and anti-corruption across its entire workforce. It has also implemented a number of in-house sustainable programs to tackle its global, social and environmental challenges head on.

Additionally, similarly to building beneficial relationships with its suppliers and stakeholders surrounding its procurement and supply chain operations, Coty’s Responsible Beauty Initiative (RBI) was launched in collaboration with Clarins, Groupe Rocher and L’Oreal.

Operated by EcoVadis as a common foundation for supplier assessment and interaction, the RBI will further Coty’s overall performance throughout the beauty supply chain and details deep insights into Coty’s sustainability efforts within its procurement operations. Gupta notes that it will therefore bring together the global beauty industry, deliver long-term positive change and maximise Coty’s shared value.

“It will amplify members’ efforts to boost sustainability in their supply chains, while ensuring the suppliers of the industry have sound ethical, social, and environmental business practices in place,” he adds.

“We recently became a member of the Roundtable for Sustainable Palm Oil (RSPO). A very important milestone towards responsible category sourcing.”

It is clear to see that Coty’s transformation journey has seen it cater to emerging trends and, but most importantly seen the business re-evaluate its purpose. Leveraging tools and technologies to garner increased efficiencies in its supply chain and speed to market, it has long-term ambitions to fully liberate the diversity of its consumers and become a lead voice in celebrating and liberating Beauty.

Arya Gupta