Estee Lauder 2010 Annual Report Download - page 46

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To฀help฀drive฀down฀costs฀and฀improve฀integration,฀our฀Company฀created฀a฀Program฀Management฀Team฀(PMT)
that provides the structure and processes needed to implement a number of programs that resulted in
increased efficiencies and savings. In fact, under the umbrella of the PMT, we achieved over $350 million
in savings in fiscal 2010. We made difficult, but sizeable reductions in our resources through restructuring
our organization, reducing the cost of goods and leveraging scale across brands and geographies. We
empowered our supply chain teams to work collaboratively with our brand teams, joining forces both
before and after launches to bring more products to market in more efficient manners. We reduced
the number of SKUs by ten percent, enabling us to better leverage our assets while managing our business
with reduced inventory.
To improve demand planning, inventory management, decision making, speed to market and tracking of
goods,฀we฀advanced฀our฀Strategic฀Modernization฀Initiative฀(SMI)฀by฀implementing฀SAP,฀an฀enterprise-wide฀
information system, at nine of our North American manufacturing sites. We continue to gain important
knowledge, which we will apply to our next phase as we roll out SMI in multiple affiliate markets and regions.
To date, we have successfully moved more than 80 percent of our in-house production onto SAP.
We have also continued to develop our Sales, Inventory and Operations Planning program— a structured
process that combines sales demands with operation capabilities in an effort to yield plans that better serve
our customers and consumers.
At the same time, we identified capability gaps within our organization and invested available funds in
those areas. We reinvested a portion of our savings in strengthening our existing capabilities and focusing
on business-building activities like television advertising. As a result, we believe we are better equipped to
recognize and capitalize on the greatest opportunities for us in every market.
45
Tom Ford Grey Vetiver was the 2010 FiFi Award winner
in the Men’s Luxe category.
LEFT: Tom Ford Grey Vetiver fragrance campaign.