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Supply Chain: Designing a Cosmetic Supply Chain

Simon Kaye
Back to the January Issue

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.

Poor 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.

The First Step: Tracking
Efficient, reliable tracking is the first step toward establishing the strongest supply chain possible. Missed deadlines, launches, production runs and promotions can destroy a company’s reputation and cause untold chaos for vendors who must explain to customers that the system has all gone wrong, perhaps causing them to lose business forever. Information control is king when it comes to creating a supply chain that self-cleans; correct information can eliminate calling backwards and forwards from a supply chain node, chasing suppliers, forwarders, shipping lines and truckers, and generally spending hours in a given day making sure that the whole line is informed about delays or problems.

The modern supply chain strives to solve vendor problems by providing transparency and listening to the needs of the people at the receiving end. A freight forwarding agency with a comprehensive electronic tracking protocol is the most cutting-edge and customer-tested method for ensuring that freight is delivered on time. These agencies allow companies the ability to track freight as it moves across the world.

A modern method that has amazing results, electronic tracking reduces pressure and workload on a company’s traffic department, allowing a company to save money, reduce stress and improve efficiency at every turn.

More information at a company’s fingertips means less time spinning wheels, and frees people in decision-making positions to pursue more important, high-level goals instead of wondering what is going on at a loading dock or arguing with customs half a world away.

Comprehensive global electronic tracking directly addresses issues that many people have been clamoring for from a professional freight information system. The right supply chain allows the cosmetics industry to operate smoothly and allows companies to more firmly establish confidence with its clients, eliminate stress and add value to products by making sure they are delivered on time, every time. It’s creating a supply chain that makes everyone look pretty.

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