L’Oreal looks at their supply chain to help increase gross margin

L'Oreal CEO Jean-Paul Agon is looking to increase their margins by making their supply chain more efficient.  They are reducing the number of buying offices from seven down to four.   L’Oreal is looking to create strategic partnerships with suppliers to improve the pricing of the raw materials.  L’Oreal hopes to continue to have a 6.5 percent growth in sales in 2008, similar to the growth in 2007.  

By improving their supply chain, L’Oreal should be able to reduce the number of suppliers and increase the effectiveness of the selected suppliers.  Their costs for materials should also decrease, as they would be buying more volume from dedicated suppliers.