An intelligent supply chain creates competitive advantage through seamless integration that meets business requirements. The objective is efficiency: minimizing downtime and obstacles to delivery while maximizing uptime as shipments get to their required destination. The key performance indicators (KPI) that define this efficiency are familiar to and regularly measured by all companies in the beauty industry, emphasizing preparation for on-time delivery with minimal delays and maximum shipment control. By contrast, inadequate preparation, reflecting incomplete information about shipments and shipping requirements, is the most costly and preventable cause of logistics inefficiencies. Using supply chain intelligence to know what to plan for defines competitive advantage.
A look at key factors shaping intelligent and efficient logistics processes demonstrates that proposition. Technology, sustainability, processing, customs and security concerns all have been transformed in less than a decade. The beauty brand owner that is not transforming its logistics processes to accommodate them will have a dysfunctional sourcing and shipping effort that is a competitive disadvantage.
Information technology with trace-back capability is essential for supply chain intelligence. Such computerized tracking must give businesses along the supply chain a common platform to capture and report on shipment information and history. The latest logistics software uses “cloud computing” solutions through web-native architecture, optimizing the entire transportation process so carriers can exchange information, regardless of the format used, in order to combine shipments for lower cost, and share shipment status with carries and trading partners.
Comprehensive electronic tracking that aggregates loads and routes is a planning solution that reduces fuel consumption and cost. It facilitates up-to-the-minute route and load scheduling to take account of everything from weather conditions to just-in-time shipment adjustments. An intelligent supply chain will use cutting-edge electronic systems to improve both fuel efficiency and cost effectiveness, by eliminating guesswork and backtracking to find misplaced shipments. It affords maximum flexibility in route and load planning so that delivery problems and energy consumption are minimized, saving fuel, resources and time.
The availability of information online and in real time can largely eliminate the need to print out paper reports and forms that create inefficiency, delay and waste. For example, the International Air Transport Association (IATA) E-freight initiative to send shipment documentation electronically before the cargo itself arrives, reduces standard cycle time by an average of 24 hours. By eliminating thousands of tons of paper a year, the IATA estimates that the E-Freight initiative can save up to almost $5 billion annually.
The new Rotterdam Rules developed under the auspices of the United Nations further supports simplified processing. The rules allow carrier liability terms to be included in individual, confidential contracts that clearly document responsibility and liability during the whole transport process. Electronic document processing and tracking can define obligations regarding carriage, risks, costs and delivery terms under the rules and reduce costs while ensuring that shipments arrive without delays or surprises.
Authorities in charge of customs and border security are adopting new systems that allow for shipment pre-clearance if the content is verified through electronic tracking and screening. The U.S. Customs and Border Protection agency (CBP) has created rules for the Importer Security Filing (ISF) on maritime shipment and the Customs-Trade Partnership Against Terrorism (C-TPAT) security guidelines for multimodal imports, both of which allow pre-qualified importers to avoid massive security delays. The same is true for the Transportation Security Administration’s Certified Cargo Screening Facilities (CCSF) for pre-screening of air cargo.
Theft, piracy and terrorism all have the potential to create massive shipment delays that can be mitigated by sophisticated and integrated techniques for protecting cargo and supply chain security. For example, in conjunction with electronic tracking, geofencing technology puts a virtual “fence” around the route that the load is scheduled to travel from pick-up to delivery, using GPS tracking to alert for problems. Electronic seals send an instant alert if container or transport vehicle seals are breached, using a combination of GPS and global system for mobile communications (GSM) for tracking and positioning.
It should be apparent that planning and information control are essential to creating an intelligent global supply chain in which accurate and instantaneous information supports competitive efficiency. With its rapid marketing cycle times, perishable products and far-flung supply chain, few industries benefit more from supply chain intelligence than beauty. An integrated process founded on realistic logistics planning to create supply chains with maximum amount of efficiency and flexibility is the most intelligent path to profitability for any cosmetics industry player.
Simon Kaye is founder and CEO of Jaguar Freight Services, with operations and fully integrated door-to-door freight solution networks in Europe, North America, South America, Australasia, Asia, the Middle East and Africa. [email protected]; www.jaguarfreight.com; 1-516-239-1900