Supply Chain Challenges Faced by Cosmetic Industry

As per the nature of cosmetics, customers get easily attracted by high-demanding goods that may be out of style tomorrow. Cosmetic businesses encourage this behavior by promoting current trends and frequently enlisting celebrities to endorse their goods. Cosmetic companies must now ensure that their products are ready for purchase after demand has been developed.

It's crucial to have a system in place for handling items from start to finish. It necessitates dependable distribution, storage, and transportation. This is especially critical since supply chain management is critical to consumer satisfaction. The cosmetics company gains a competitive advantage by making in-demand goods available for purchase.

With that in mind, this article addresses the major challenges faced by the cosmetic industry and how they can be mitigated.


Vendor-Managed Inventory with Automated Material Handling

Businesses can lessen the risk of carrying too much inventory by using a vendor-managed inventory (VMI) approach, which allows them to respond more quickly to shifting demand trends. A manufacturing plant that is operating 200,000 SKUs three months out, for example, is dangerous since it carries a significant volume of stock that may or may not sell. 

Charge suppliers with inventory management to assist alleviate this stress by placing items in their least valuable condition further back in the supply chain. Companies can use this flexibility to rationalize packaging requirements for various retail channels closer to demand, or even source all inventory from a single location.


Temperature Control Compliance & Material Handling Technology

Cosmetics are frequently unique and distinctive due to their composition, and they are sensitive to certain temperatures and can be destroyed owing to changes in ingredient qualities, necessitating the use of special transportation circumstances. It is also common for cosmetic shipments to be handled by multiple stakeholders and delivered long-distances via several (sometimes all) modes of transportation, including road, air, sea, and railway freight, as well as possible exposure to various climate and weather conditions, to dry stagnated storage spaces throughout the shipment's journey.

Failure to observe temperature fluctuations (for both raw materials and completed products), also known as controlled temperature, can result in the loss of physical and chemical qualities of the goods, or, in other words, product spoiling. Inadequate planning, which reflects insufficient knowledge about shipments and shipping requirements, or a lack of shipment condition monitoring capability, is an expensive and avoidable cause of logistics inefficiencies, especially in the cosmetics sector.

Cosmetics must be kept in good condition and monitored during their journey via the supply chain. When cargo is being moved, one approach to achieve this is to keep detailed temperature data logs. There are a variety of options on the market, such as IoT-enabled devices that detect temperature and humidity, but some are just more practical and scalable for cosmetic shipping than others. Consider a flexible QR Data Logger solution for shipping condition monitoring, which includes a cloud-based platform.


Conditions of Shipment and Traceability Down to the Last Detail

Many brand manufacturing businesses are increasingly emphasizing the importance of not only being able to track their products along the supply chain, or “traceability”, but also being able to track shipment conditions down to the smallest detail. 

This solution is very useful for businesses in the event of any irregularities or damage because it allows them to locate a specific batch of cosmetic product and withdraw it, or at the very least can see something went wrong with the shipment, can check its conditions, and can take action based on the information available.

To succeed in today's business environment, quality control managers and third-party logistics (3PL) providers must work toward an intelligent supply chain, which should begin with a better understanding and monitoring of their shipment conditions at all times with actionable insights readily available. Not only for cosmetic companies but also for supply chain intelligence, information technology allows for granular shipment condition monitoring and tracking is critical.


How L’Oréal Enhanced Their Supply Chain Management? 

The Supply Chain plays a critical role in meeting the new challenge of E-Commerce, from order handling to delivery. It provides a means of meeting client demand and also enhancing the Group's brand image. Their solution entails a shift to technology-assisted logistics, as well as a greater reliance on data, such as in the form of connected inventory management.

All of the stages that enable L'Oréal to provide the products and services are included in the Supply Chain. They serve as a Critical Link between their plants and the people who buy them.

The brand distributes over 6 billion items each year. It implies that every second, they send out two orders to eight different types of distribution channels around the world, including hair and beauty salons, mass market, e-commerce, and travel retail. As a result, they have a direct link to the market – and to consumer expectations.

They have put in place an Agile system of Temporary Distribution Centers to deal with peaks in demand, such as those experienced during the current pandemic, either in the form of physical stores closed during the lockdown or by adapting distribution centers that had not previously processed orders from e-commerce.


Quality Order Management System is the Need of the Hour

In the cosmetics sector, an efficient supply chain is critical for maintaining a competitive advantage, correctly managing retailer requirements, and overcoming supply and demand difficulties. Cosmetics Quality Control is equally crucial for all stakeholders engaged in the supply chain. 

Cosmetics are distinctive in their composition and are sensitive to particular temperatures, which can cause damage owing to changes in ingredient qualities, necessitating the use of special transportation circumstances. Product spoilage, flaws, or damage can cause severe problems for the producer and distributor, as well as damage to their reputation.

MWI Solutions offers one-of-a-kind Order Management Software and warehouse control system that has helped many prominent brands like L’Oréal. Get in touch with the company for a free consultation today.


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Posted: 17 Jun 2021

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