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Supply Chain: Designing a Cosmetic Supply Chain

By: Simon Kaye
Posted: January 10, 2008, from the January 2008 issue of GCI Magazine.
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From lipstick and rouge to the boxes and bottles that contain them, cosmetics is a global industry. It is remarkable that the system that puts all these pieces together functions at all—there are a million different ways it can fall apart, and any number of snags and meltdowns can occur as packages move from warehouse to warehouse across the globe. Ensuring that finished products are available for sale at a retail cosmetic counter is dependent upon supply chains that are set up for maximum efficiency, tracked and logistically sound. Understanding these supply chains and how they can be improved in the modern age is fundamental to creating a business that is sustainable and not susceptible to catastrophe.

The Supply Chain Dissected
A good supply chain links together nodes of production and shipping in the most efficient way possible to bring materials from the manufacturer to the customer. Supply chains can be notoriously tender and subject to catastrophe as a result of the world’s constantly shifting economic pressures and unstable governments. Even a supply chain that seems like it is running well could be crippled by a storm or a political power shift. A company must always understand the important steps and processes involved in taking raw materials and turning them into finished goods, even as it leaves the nuts and bolts of freight management to outside interests. A company must know what has been shipped, what is in transit, what is due to be shipped, where freight is in the cycle and how the shipment is performing against the stated timetable.

The more robust a company’s supply chain, the easier it is for a company to make changes and institute new product lines. A strong supply chain creates a strong company.

Why It Can All Go Wrong
A mismanaged supply chain can harbor any number of hidden outcomes that all generally result in a company losing money and efficiency. Specific functional problems must be targeted and eliminated with a top-down, atmospheric approach—and for that, a company needs as much information as it can get about the mistakes it has made in the past to effectively shape future production.