Estée Lauder Cos. is advancing its multi-year transformation strategy, first announced in 2023, with cost optimization plans set to continue through 2026. As part of this initiative, the company is focused on automating inventory processes to increase profitability and enhance operational efficiency.
Estée Lauder is developing an artificial intelligence-powered application designed to automatically deploy stock, according to statements shared during the D.B. Global Consumer Conference. The system analyzes global trends and consumer behavior to anticipate demand spikes and reposition inventory accordingly.
The AI system will learn over time, refining its accuracy and intelligently aligning the demand and supply sides of the business. The goal is to reduce friction across the distribution network and deliver products more efficiently to the right markets, at the right time.
A Modern IBP as the Foundation
At the core of this advancement is the company’s integrated business planning (IBP) efforts, which includes an AI-driven process launched last year to increase costs, supply chain and inventory efficiencies.
Estée Lauder’s IBP helps with demand planning, synchronizing inventory with business operations in an increasingly bumpy consumer goods landscape.
“That has been a significant focus in the last few years because, without this, it is very difficult to optimize all the other capabilities in our supply chain,” said Roberto Canevari, EVP, chief value chain officer, during the conference. “We need scenarios because it’s so volatile that it is very difficult to anticipate everything.”
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“We have prepared a lot of scenarios so that we can pivot quickly from one to the other when it’s the case,” added Canevari, who joined the restructured executive team earlier this year.
Digital twin technology, now installed at all Estée Lauder factories, allows the company to conduct real-time modeling to service inventory around the world.
