Estée Lauder Embraces AI for Adaptive Manufacturing
The Estée Lauder Companies (ELC) is committed to revolutionising its manufacturing operations through supply chain enhancements.
Unlike many companies stepping back from sustainability promises, Estée Lauder is reinforcing its commitment to responsible operational practices, despite emerging criticisms against ESG programmes.
This approach is steered by Roberto Canevari, Executive Vice President and Chief Value Chain Officer, who emphasises safety, sustainability and respecting people as the key pillars of its strategy.
The agile supply chain framework
ELC’s global supply chain transformation is anchored on responsiveness and speed, addressing the dynamic needs of today's consumers.
“We’re moving toward a much more agile model. More product launches, less inventory,” says Roberto.
To actualise this vision, the company plans to roll out nearly 30% of its new products in less than a year.
ELC is optimising its global manufacturing sites significantly in Europe, including key hubs in Belgium, the UK and Switzerland, in support of this initiative.
Among these sites, the Oevel campus in Belgium stands as a testament to ELC’s push towards sustainability in manufacturing.
It handles 60% of the global product volume and is undergoing upgrades centred on energy efficiency, enhanced water systems and waste reduction.
Nancy Mahon, ELC's Chief Sustainability Officer, says: “Oevel exemplifies how we’re committed to advancing sustainability for the long term.”
Such efforts align with the company's strategy of integrating historical European connections, such as its longstanding presence in Italy, to enhance supply chain efficiency and reduce carbon footprints.
AI: a core component in manufacturing evolution
AI is pivotal in ELC’s manufacturing transformation, with notable synergies formed with Microsoft and Zero100 to propel innovation along the supply chain.
This collaboration has nurtured the AI Innovation Lab, fostering advancements like the Voice-Enabled Makeup Assistant introduced in 2017.
AI's role in shifting ELC’s operational model from a reactive to a predictive strategy highlights the technology’s potential—enabling precise demand forecasting, inventory optimisation and operational productivity.
Olly Sloboda, Co-Founder and CEO of Zero100, acknowledges the value of these partnerships: “Love what we’re building with Zero100 and The Estée Lauder Companies Inc. and cool to be mentioned as a strategic partner alongside Microsoft."
The AI-centric approach is a shared industry-led initiative, with Zero100 stating in their AI ROI Report that 90% of large enterprises are exploring AI integrations.
Leading companies, including Walmart, Amazon, IBM and ELC, are investing in AI skills development among their workforce, using diverse methods like financial incentives and promotions to encourage employee engagement with the technology.
Maintaining ESG commitments amidst changing narratives
As other organisations dial back their ESG communications, a practice dubbed 'green-hushing'Estée Lauder remains vocal about its environmental and social accountability.
This stance contrasts with the broader market trend, as evidenced by over US$8bn withdrawn from global ESG funds in early 2025, primarily by U.S. investors.
Despite this, Estée Lauder persists in defining clear ESG goals and utilising AI to bolster transparency and fairness within its supply chain, spanning everything from forecasting to production.
Financial metrics further validate Estée Lauder’s commitment to progressive manufacturing strategies.
Roberto highlights a 300-point gross margin enhancement in the third quarter, attributable to reduced inventory and optimised operations as part of their Profit Recovery and Growth scheme.
These advancements underscore that embracing adaptability and accountability in manufacturing processes fosters profitability alongside sustainability.
