Studies on human behavior carried out by specialists in the field report that each of us-regardless of gender and age-uses at least eight cosmetics a day. From personal hygiene, through moisturizing and protection, to the final touch of fragrance: cosmetic products are indispensable for everybody to experience that pleasant feeling of well-being.
For these reasons, the development of cosmetics production and distribution is subject to Regulation 1223/2009 of the European Parliament and the European Council, with a significant focus on market safety. Every cosmetic product brought to market has to comply with certain requirements that affect the standards of suppliers’ behavior. Therefore, the cosmetics industry supply chain faces big challenges, from global sourcing, production, and multi-channel distribution, whether in small stores, specialty retail chains, large-scale retail, or to end customers through e-commerce.
Demand growth and impacts on the cosmetics Supply Chain
The development and continuous growth of the Cosmetic Business are more and more oriented towards sustainability, combining the economic results of production activities with attention to the environmental and social aspects related to them. To be certified as “B-corp” is a goal, if not almost a duty, for companies in the industry.
The cosmetics sector is characterized by its resilience and non-cyclicality. These features are combined with the creativity, inventiveness, initiative, and inclination to innovate and seek new solutions that distinguish the industry’s entrepreneurs.
In the cosmetics industry, in order to have a competitive advantage over the entire supply chain, it is crucial to be able to properly manage the retailers’ needs and help address the challenges concerning supply and demand. In addition, companies must ensure the quality of their products with strict control and monitoring of the same throughout the entire life cycle.
Demand in this industry is growing, and manufacturers must continually adapt their supply chains to keep costs down and stay competitive. This occurs in parallel with a continuous need to bring new products to market.
Challenges in the cosmetics industry
Pandemics, wars, lack of infrastructure and labor related to maintaining the reputation and associated expectations of a product in relation to the country of manufacture (“made in”), are all obstacles for the global supply chain, which is becoming progressively complex. Another obstacle the cosmetics supply chain is facing are geographic restrictions dictated by sourcing natural, quality ingredients with certain specifications.
Cosmetics trends affect demand, so companies must be aware of what their customers want to buy. Therefore, meeting demand promptly can be a challenge, and being able to have a supply chain that responds quickly can become a differentiator for a cosmetics company’s business. This means being able to control the transportation and flow of goods along the entire supply chain-through a TMS system-providing visibility all along the way, from suppliers to the manufacturing plant to the final destination, and enabling quick monitoring and response.
All these conditions lead companies to equip themselves with “agile” systems to support a responsive and increasingly Demand Driven Supply Chain. This requires innovative technologies that enable them to schedule production and have complete visibility, from supplier to store, in order to meet the volatile demand created by customers.
A sustainable supply chain for the cosmetics industry
So how do we find the perfect balance between the business development needs and the preservation of the planet? The entire cosmetics supply chain has had to question its production and distribution processes to meet the consumer demand for safer and more eco-friendly products.
This evolution will involve all players in the process, from raw material selection to formulation, from machinery to packaging, from logistics to end consumers.
The sedApta solution
Supply chain flexibility and responsiveness are essential for the success that every cosmetics company must achieve.
Thanks to the sedApta Suite‘s ability to integrate supply chain processes, cosmetics companies are now able to plan and monitor everything from the raw material supplier to the finished goods warehouse and, for those with a retail chain, all the way to the store, thanks to allocation, store replenishment and push allocation solutions.
In terms of sustainability, the sedApta suite offers “green” shipments through more accurate transportation planning, with attached CO2 calculations based on shipping method, route, fuel type, and volume, then offering the ability to neutralize the carbon footprint through specific proposed actions.