How Estée Lauder Made Procurement Matter to the Bottom Line

The company transformed procurement from a cost center into a revenue driver. Here's how.

The Estée Lauder Companies faced a straightforward problem. Procurement was still operating like a transactional cost center. Suppliers were squeezed. Decisions lagged behind market shifts. Innovation felt slow.

So ELC rebuilt the entire function from the ground up. The company embedded AI into daily operations. It retrained its teams around new ways of working. It tied procurement directly to revenue, not just savings.

The transformation reveals something important for any business chasing growth in volatile markets: procurement can be a competitive weapon or a cost containment exercise. ELC chose to compete.

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The Mindset Shift: “You Can’t Just Focus on Cost”

ELC’s transformation started with a candid acknowledgment. The old model wasn’t working anymore.

Nirav Mehta, Global VP for Direct Procurement at ELC, articulates the shift this way: “I think it’s critical, as a modern-day procurement organisation, that you are not only focused on cost, but also on how you can drive that competitive advantage for the business. That can only happen by focusing on the overall value proposition of your business, as well as the end consumers and their priorities.”