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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.
page 2 of 4Poor vendor control can lead to an incredible amount of unexpected hidden costs. Poor quality of materials and inadequate packaging can lead to wholesale product destruction, and poor or incomplete documents can result in delayed shipments.
Such messiness when it comes to vendor responsibilities can lead to customs delays, cargo loss, goods being rejected out of hand during border crossings, and outright theft—all of which cost money. Solutions to problems not caught early are also costly. Switching cargo to airfreight as a last ditch effort to solve the problem of incompetence and poor preparation, for example, may avert total disaster but at a steep price.
Not understanding the marketplace can also have dramatic repercussions at every stage of the supply chain building process. Companies purchasing from oversea suppliers must coordinate closely with shippers, and ensure that those responsible for shipping the goods are intimately familiar with the customs rules and regulations of every country through which freight will pass, in addition to understanding the associated service parameters and costs.
A lack of understanding about the freight marketplace can result in cargo that cannot be imported or, more likely, added and unanticipated customs costs and possible exam fees. Additionally, a company can incur unanticipated freight costs or surcharges as a result of improper or inefficient routing of cargo.
Finally, a lack of information is both the most preventable and most costly problem when it comes to shipping freight. A lack of information can refer to incomplete or missing information about the status of shipments, an inability to retrieve information when needed or an inability to adequately integrate systems. This can cause a colossal amount of wasted time and energy spent chasing information that ought to be readily available, and lead to a systemic inability to identify and correct problems.