Various packaging shapes and sizes are the norm-sometimes even for the same product. In a large retail or chain drugstore, packaging is critical to helping a product stand out. While large wholesalers often look for less-than-truckload and truckload deliveries, smaller buyers may rely instead on parcel and expedited shipments.ĭifferent mass retailers also often necessitate different packaging.
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Larger companies frequently target four markets: consumer products to mass retailers and chain drugstores beauty supplies to salons and professional product groups luxury brands to department stores and boutiques and dermatological products through dermatologists. Health and beauty care products are often sold into a variety of retail streams. For example, Penske Logistics employs an on-site pharmacist within its cosmetics client's warehousing operations to oversee processes such as product shelf-life, health conditions, hygiene, and packaging that ensure regulatory compliance. In some cases, pharmacists are enlisted to ensure compliance. The industry is also heavily regulated, and 3PLs need certain licenses to handle products.
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Warehouse management is another important aspect of the cosmetics and skin care industry, as some products are perishable or need refrigeration. "TMS and route mapping tools provide shippers with accurate simulations, transportation optimization, and cost reductions," says Orrigo.
In Brazil-one of the largest and fastest-growing beauty markets in the world-Penske Logistics uses a TMS to help a large cosmetics client manage on-time delivery of products to customers, dealers, and retailers in big cities such as São Paulo, Recife, and Rio de Janeiro where traffic congestion can create an enormous obstacle, causing tranporation delays that erode profits. "Cosmetics companies have to understand the process before they can improve it or reduce costs, and that comes down to good information management," Bonebrake says. Some of these companies are turning to transportation management systems (TMS) to help smooth the flow of goods and improve visibility. Tompkins works with several large, multinational companies that distribute products around the globe, and often don't have much control over that final link in the supply chain. "Sometimes, when a product leaves the distribution center, it disappears into a big black hole," says Valerie Bonebrake, senior vice president at Raleigh, N.C.-based supply chain consultant Tompkins International. Efficient supply chain management is critical, yet because most cosmetics and skin care companies use contract manufacturers, visibility into logistics and transportation can be a major obstacle. The fast pace of the cosmetics and skin care industry creates a number of logistics and supply chain challenges. "To thrive in the current business climate, cosmetics logistics managers and third-party logistics (3PL) providers must handle high volumes of product, understand temperature and handling restrictions, navigate licenses, and ensure on-time delivery at a competitive cost," says Fabrício Orrigo, sales director for Penske Logistics South America. Managing cosmetics logistics requires expertise in numerous areas. "Logistics plays a key role in driving customer satisfaction, which is a competitive advantage." "Beauty consumers want their hot product now, and they do not want to wait," says Paul Cali, director of North American logistics at New York City-based cosmetics and skin care company Avon. Handling products to the point of sale is critical, and requires punctual and reliable transportation, storage, and distribution.
Once they generate demand, they must ensure those products are on the shelves and available for purchase while they are hot. Beauty and skin care companies relentlessly promote the latest trends, often enlisting celebrities to help them. Beauty product consumers can be fickle-today's hot cosmetics product may be out of vogue tomorrow. The cosmetics and skin care industry wages a constant tug-of-war battle between supply and demand.
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