Client Name

L’Oréal Pakistan (Private) Limited

Faculty Advisor

Mr. Syed Atif Murtaza Qaiser

SBS Thought Leadership Areas

Entrepreneurship and Innovation

SBS Thought Leadership Area Justification

Our project aligns strongly with the Thought Leadership area of Entrepreneurship and Innovation, as it reimagines L’Oréal Pakistan’s distribution network through a forward-looking, data-driven transformation grounded in innovative supply chain strategy and operational design.

We introduced entrepreneurial thinking by identifying inefficiencies in L’Oréal’s dual-warehouse model and proposing a novel, regionally optimized “stock balancing” strategy for 2028. Rather than settling for existing logistics flows, we applied scenario modeling and cost-benefit analysis to develop an innovative network design that enhances agility, reduces lead times by up to 60% in northern markets, and improves warehouse utilization.

The project also incorporated innovation in operational forecasting. We identified the limitations of national-level planning and recommended a shift towards regional forecasting and AI-driven demand planning, enabling smarter inventory positioning across hubs. This directly reflects global best practices but was customized for the unique challenges of an emerging market like Pakistan, where disruptions are common.

Our methodology further highlighted innovative decision-making frameworks, such as cost-to-serve analysis, dual-warehouse resilience modeling, and hybrid logistics structures - applying complex concepts like distributed inventory and multi-echelon optimization in a practical, implementable format for the client.

From an entrepreneurial lens, the project embraced risk-taking and experimentation, proposing a more expensive - but service-enhancing - model with the strategic intent of supporting L’Oréal’s market growth and competitive positioning. We also quantified the potential trade-offs and revenue gains, showcasing how innovation can be a lever for both customer value and business sustainability.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

Our project directly aligns with 4 SDGs by proposing a data-driven, future-oriented distribution strategy for L’Oréal Pakistan that balances operational efficiency with social and environmental impact:

SDG 8: By optimizing L’Oréal Pakistan’s logistics operations, the proposed dual-hub distribution model supports business scalability and workforce upskilling. The project envisions a significant expansion in warehouse and transportation operations, especially in the Lahore region, creating employment opportunities and promoting regional economic inclusion. Improved distribution performance also enables faster market penetration and business growth, indirectly supporting economic activity across the value chain - from manufacturers to retailers.

SDG 9: The core of our project involves innovating L’Oréal’s national supply chain infrastructure. We proposed a restructured warehouse network, the use of inter-hub stock transfers, and digital forecasting tools, aligning with global best practices. This forward-looking infrastructure model enhances service resilience, supports agile market response, and introduces modern logistics planning suited to a fast-evolving FMCG landscape.

SDG 12: Our strategy reduces redundant cross-country shipments, thus eliminating wasteful logistics practices and improving distribution efficiency. For example, instead of Karachi warehouse shipping to far northern areas, our regional realignment allows Lahore to serve those zones directly - reducing emissions, handling time, and logistical duplication. This promotes a more sustainable, efficient, and responsible supply chain, aligned with L’Oréal’s global sustainability goals.

SDG 13: By reducing average lead times and shortening transport distances, the stock-balanced model helps minimize the carbon footprint of L’Oréal’s nationwide distribution. The proposed strategy encourages optimized truck loading, reduced fuel consumption, and lower emissions, contributing to climate action goals. While total logistics cost increases slightly, the environmental cost per unit transported decreases due to better regional routing.

NDA

Yes

Abstract

L’Oréal Pakistan currently operates a dual-warehouse distribution network, with the Karachi warehouse managing imported inventory (Consumer and Professional Products Divisions) and the Lahore warehouse handling only locally manufactured Consumer Products. This setup, while functional, leads to inefficient cross-regional dispatches—Karachi supplying northern areas and Lahore servicing the south—resulting in extended delivery lead times and logistical strain. Motivated by these inefficiencies, this project aimed to assess the cost feasibility and operational impact of a regionally rebalanced stock distribution strategy for the year 2028. A data-driven methodology was employed using 2025 dispatch data as the base year. Product volumes were translated into weight to model transport loads, applying factors of 0.2 kg per unit for Consumer Products and 0.15 kg per unit for Professional Products. Distinctions were made between full truckloads and low-volume courier shipments, the latter priced at PKR 120 per kilogram for dispatches under 0.75 tons. Future projections were modeled by applying a 25% annual growth rate for Consumer Products and 5% for Professional Products, aligned with management expectations. Logistics costs were assumed to increase by 10% annually. Two models were constructed for 2028: a continuation of the current overlap-based model and a stock-balanced model wherein Karachi services the South region while Lahore covers Central and North. The analysis found that in 2025, L’Oréal moved approximately 16.46 million units at a logistics cost of PKR 41.7 million, averaging PKR 2.54 per unit. The 2028 baseline model projects 43.4 million units at PKR 113.7 million but retains long lead times of up to 7 days for certain routes. In contrast, the stock-balanced model projects a higher total cost of PKR 142.1 million (PKR 3.3 per unit) but achieves substantial service improvements, including a 40–60% reduction in lead times and improved warehouse load distribution. Although slightly more expensive, the proposed stock balancing strategy offers better agility, customer service, and resilience, particularly in the face of regional disruptions. A phased implementation is recommended, supported by improved forecasting and logistics coordination.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

Download

Available for download on Tuesday, June 16, 2026

Share

COinS