Responsible business practices are the key to Oriflame’s success and future growth. Whether in the day-to-day business activities or the impact of the products, Oriflame is committed to achieving ever higher standards of quality, social and environmental performance. From employees to consultants, paper sourcing to product development, manufacturing to events, Oriflame believes its global reach and marketplace success comes with a duty of care to the people involved and the natural resources it uses.
Oriflame has always benefited from the ethics of its founding fathers. In 2010, the Board of Directors decided to take a first step in deepening its focus on sustainability by instigating a new corporate strategy for environmental responsibility. The sustainability plan contains a series of commitments across four key areas: sustainable sourcing, climate change, water and waste. It also reaffirms the Company’s sense of social mission, from the wellbeing of Oriflame employees and consultants to community investment partnerships and philanthropic activities. The overall purpose is to live up to the expectations of customers, sales consultants, employees, shareholders, and society in general, who all aspire to be part of a responsible business.
Customers and Sales Consultants – the highest standard in the right place at the right time
Oriflame’s quality assurance team works both with in-house manufacturing operations and subcontracted suppliers to achieve consistent adherence to the high quality, safety and ethical standards set by the Company, regardless of the location of the manufacturing site. Products must comply with stringent international regulatory requirements, and are extensively tested to ensure optimum safety, efficiency and quality.
More than 700 million products are sourced annually from more than 50 suppliers and shipped to more than 60 markets worldwide. The Global Supply Strategy focuses on making the process easy, reliable and user-friendly for the consultants and customers by better aligning supply and sales in the Group. The strategy involves cutting lead times and increasing flexibility in the end-to-end supply chain by consolidating the inventory closer to the main markets and by eliminating intermediate warehouses in the various markets, as well as building capacity to support growth, increasing in-house manufacturing and sourcing regionally where appropriate. The target is to have a base of flexible, efficient and quality-orientated suppliers who ensure product availability, claims and quality, delivery times, delivery reliability and accuracy in all of Oriflame’s markets.
The Oriflame inventory levels have been relatively high in recent years due to long lead times and the difficulty of making accurate forecasts. Lower inventory would have resulted in late deliveries, poor service levels, and lost sales. To resolve this issue, the supply and distribution planning, as well as forecasting teams, have been strengthened and a new it-system (JDA) has been implemented. As of September 2009, plans of resource distribution (DRPs) are updated daily instead of monthly and since the beginning of 2011, 90 percent of the planned production volumes will be adjusted accordingly on a weekly basis.
Environmental sustainability – Understanding Oriflame’s footprint and reducing its impact
In 2009, Oriflame commissioned an environmental assessment of the Company’s operations. The analysis spanned all phases of the life cycle, from raw material extraction to production and disposal, focusing mainly on the carbon footprint. The study identified Oriflame’s most significant environmental impacts and serves as the foundation for the new Oriflame environmental sustainability plan.
Oriflame’s new sustainability strategy aims to reduce environmental impacts through a number of key priorities across four main areas: sourcing of sustainable natural resources such as paper, palm oil and other ingredients; reduction of CO2 and other greenhouse gas emissions; reducing water consumption and emissions to water and; minimising waste throughout the supply chain.
Oriflame is now rolling out a series of improvements designed to embed sustainability principles into the DNA of the business.
Oriflame’s sustainability plan is overseen by the Chief Executive and Board of Directors. It will be regularly updated, with new commitments added and existing standards raised. Oriflame’s goal is one of continuous improvement, informed by a range of external stakeholders and partners.
During 2009, a Senior Advisor on Environmental Sustainability, reporting directly to CEO, was recruited to design and implement the Company’s sustainability strategy. Moving forward, the responsibility of fulfilling Oriflame’s ambitious commitments will sit firmly within every part of the organisation. Oriflame is also exploring exciting new ways to engage employees as well as 3.5 million consultants globally on these crucial issues.
