The house of Louis Vuitton is a leader in the fashion industry due to its devotion to traditional craftsmanship paired with innovative avant-garde. Louis Vuitton now excels in the production of ready to wear, shoes, watches and jewelry in addition to the traditional luggage, bags and accessories. Louis Vuitton owns 17 production workshops, an international logistics center, and exclusive shops worldwide. Louis Vuitton had to change their manufacturing process to keep up with their customer’s needs and expectations and to maintain and compete for market share. Louis Vuitton’s supply chain process was very inefficient and slow. After several changes they created a modern and efficient supply chain. The supply chain changes resulted in an increased availability of their products in their stores around the world, a new and improved distribution center and store strategy. Keywords: Luxury, Supply Chain, Innovation, Fashion

1. LOUIS
VUITTON
Jean Charles Hodouin
LIM New York 2012

2. Company Background
•Paris,1854
•Trunks, Luggage, Bags
•LV Monograms
•Tradition, Innovation
•1977: 2 Stores.$10m

3. Background

4. Background
•
1983 – Louis Vuitton Cup
•
1987 – LVMH is born
•
•
1988 – Profits +49%
1989 – 130 stores worldwide

5. Background
1990 – Yves Carcelle, President LV
1998 – Marc Jacobs, Artistic Director
2003 – Multi color monogram

6. Operations

7. Marketing

8. Marketing

9. Marketing

10. Marketing

11. Office Management
“Developing knowledge and versatility,
recognizing creativity, encouraging
independence and a continual focus on
enhancing performance are all integral to our
training policy.” ~ LV’s HR 2011

12. Financial Management

13. Legal Management

14. Old Supply Chain
 Each factory - 250
employees
Each specialized in one
production step
20 to 30 craftsman = 1
Louis Vuitton tote bag
Hard to transfer
employees
Difficult to produce more
Couldn’t cover the highdemand = Lost Sales
Factories not flexible
The supply chain process inefficient and slow

15. New Supply Chain
Distribution Process
Manufacturing Process
 2005 –McKinsey & Co
 Pegase
 New products every 6
weeks
 Carmakers Manufacturing
process – lean production
 New distribution center
 Zero-defect policy
 global distribution center
outside Paris
 6 regional distribution
centers around the world
 These 6 distribute the
products to the stores
 13 factories that produce
accessories
 Employees are less
specialized
 Organized in team formats

16. New Supply Chain
Distribution Process
Overall Results
New store and
distribution strategy
Maintain brand identity +
high quality
•Keepall Reorganization:
Reduced returns 50%
•Managers/Feedback
Increased sales, increased
stock
•Right products in the right
stores
•2 Teams – Stock
room/Sales Floor
Maintaining10% annual
growth for the next several
years

17. Technology
Technology in Operations:
 E-learning system EKP
 Training: soft skills, system usage, anti-
counterfeiting-training, internally and externally
sourced coursework
 Cost-effective, offers educational diversity and
flexibility
 Easy accessible and user-friendly

18. Technology
 LANDesk Management Suite
 high PC security
 Maintain on high level of performance
 PC systems up-to-date and well-managed
 Shortens security patch development times, reduces
man-hours, eliminates interruption, reduced network
traffic

19. Technology
 Product Lifecycle Management
 Widely acknowledged in apparel, fashion, and
accessory industry
 End-to-end footprint solution
 PDM, merchandise, supplier collaboration, &
performance-management
 Reduction of product failure risks, material costs,
process friction & lead times

20. Technology
Technology in Supply Chain
 I2 solution suite
 Closing the gap between demand and supply
 Demand planning with forecasting processes &
statistical techniques
 Improved forecast accuracy
 Increased velocity

21. Partners

22. JD Edwards
Services
 Integrated modern system which also connect
with the retail system (POS)
 Tool of flexible management and advanced
administrative information
 Accommodate management of multi-attribute
items

23. DB Schenker
Services
 Integrated network including US, Canada and
Mexico
 Lowest cost
 Quality
 Sustainability

24. FedEx
Services
 Keep the right mix of product in stock
 Hottest and fast-selling items
 Rush orders
 Web-based FedEx App

25. Landsberg
Services
 One stop-source
 Customized boxes
 ISO 9001
 E-truck routing system

26. McKinsey & Co.
Services
 Fundamental overhaul
 New factory format (Pegase)
 Manufacturing process more flexible
 Ship fresh collection every six weeks
 Global distribution hub outside Paris

27. Best Partners
"Behind the creative magic of Louis
Vuitton is an extremely efficient
supply chain”
 Quality Management Systems, J.I.T. and
fulfillment services
 Variety of value-added services including
monitoring inventory levels
 Support and technology to do so
Best Practices

28. LOUIS
VUITTON