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Supply Chain: Don’t Lose Your Company’s Future En Route

By: Simon Kaye
Posted: June 9, 2008, from the June 2008 issue of GCI Magazine.

With global sales of nearly $300 billion, cosmetics and toiletries presents one of the most complex global sourcing challenges. Much of the sourcing for the industry involves a fragile web of small, fragmented suppliers that must be linked together using a sophisticated and effective logistics technology.

What’s the Challenge?

Fragrance essences must not spoil or degrade before production because of delayed shipment or having been shipped without proper protection. Regulatory concerns are substantial, because some cosmetic products with therapeutic effects are also considered to be drugs and must therefore comply with both the cosmetic and drug provisions of FDA regulations—including special storage needs that present one of the greatest challenges for both suppliers and third-party logistics partners. Add the special handling requirements of products that increasingly use revolutionary nanotechnology for greater absorption, and the cosmetics supply chain’s concerns go far beyond ensuring the availability of boxes and bottles. The shipping status of all these products cannot be left to chance. Competitive demands require that cosmetics producers know at all times where their products are and when they will arrive.

Cosmetics manufacturers and suppliers simply cannot afford to have their sourcing shipments lost, misdirected or stolen. The result of such shipment problems is missed deadlines, production runs, product launches and promotions that may destroy a company’s reputation. And in today’s hypercompetitive luxury goods market, lost reputations and customers are hard to regain.

What’s the Solution?