Cosmetic companies that do not implement innovative solutions in their supply chains are less profitable than their competitors. On a global scale, the beauty industry will generate annual growth of 4-6% by 2021. This growth will not be spread evenly across all retailers. Experts forecast the biggest growth in e-commerce. Brick-and-mortar stores will practically stagnate. This changes a lot for cosmetic distributors and logistics operators providing services to this sector.
The organization of production and distribution of cosmetics is regulated by the Regulation (EC) No 1223/2009 of the European Parliament and of the Council (in 2013, the Regulation was amended), which places particular emphasis on market safety.
Every cosmetic product placed on the market must, therefore, meet certain requirements.
But let’s start with a definition. The cosmetic product is defined in that Regulation as follows:
it means any substance or mixture intended to be placed in contact with the external parts of the human body or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours.”
Controlled storage and transport temperature
The logistic chain of cosmetic products is very long, and the beginning of the process is in fact in the laboratory, where the recipe for a new cosmetic product is being created. Later it covers the entire production process and then transport to the point of sale (usually a drugstore, and recently also directly to the final customer). In all cases, we are dealing with supplies of substances, preparations, intermediate products or finished products.
Cosmetic manufacturers use specialised ingredients that must be stored and transported with particular care in order to avoid adverse effects related to weather, temperature, humidity and light. All this also affects the rules of conduct for suppliers and carriers, as well as the requirements placed on them.
The logistics chain is, in fact, a list of mandatory requirements to be met in order for everything to be legal. Each manufactured and distributed cosmetic product must be notified in accordance with the Regulation before it can be placed on the market.
Cosmetic products in many cases are specific, unique due to their composition, which often means the need for special transport conditions. Sometimes it means the so-called controlled temperature, and failure to observe temperature regimes (both in the case of raw materials and finished products) may mean the loss of appropriate physical and chemical properties of the goods.
Short transportation times are a must
Cosmetic products must, therefore, be properly preserved for which the shipper is responsible. The role of the carrier is to provide a means of transport that allows the task to be carried out without hindrance. It is essential that the product is delivered intact to the customer with the shortest possible transportation time.
If this is not possible, it is necessary to have a contingency plan and therefore to know how to act in an emergency.
The regulation specifies in detail who is the distributor of cosmetics, namely:
any natural or legal person in the supply chain, other than the manufacturer or the importer, who makes a cosmetic product available on the Community market.”
The distributor is responsible for both the transport and storage of the finished goods. In the process of distribution of cosmetic products, from the point of view of both the manufacturer and the distributor, it is very important to organize appropriate transport conditions for the products concerned.
It is very important for the manufacturer to ensure that the product reaches the potential customer in the best possible condition while maintaining its properties, appearance, consistency and smell.
The logistics operator, the shipper and the carrier must remember that every cosmetic product must be traceable from 2013 onwards. In practice, this means that data related to the flow of a product throughout the supply chain, at individual stages, can be retrieved at any time. Practically no one in the supply chain remains anonymous, which further increases their responsibility. No wonder that in the logistics of the cosmetics industry, further actions are taken to improve the quality of production supplies, but also to improve the transportation of goods from the manufacturer to the final customer.
Two types of supply chains
There are two types of supply chain management. The first one is based on management by the recipient; it is the recipient who takes responsibility for carrying out and controlling the entire order process from beginning to end (meeting the delivery deadline and monitoring the supply chain). The relationship between the supplier and the recipient of the product is quite limited.
Alternatively, the supply chain can be managed by the supplier, who (usually the manufacturer himself) is primarily responsible for creating orders for the product according to the requirements and needs of the recipient. In this case, the contact is much closer, a constant exchange of information between the manufacturer and the recipient is necessary (the latter defines their requirements and the demand for the product, they also constantly control the supply chain).
Innovative work methods are needed to meet the biggest challenges in the cosmetics supply chain. Operators usually offer comprehensive solutions.
OCS experts explain how the companies specializing in the distribution of such goods commission the transport of cosmetics at a controlled temperature, either in entrusted or own OCS packaging.
“Thanks to the fact that we have the appropriate facilities and vehicles adapted to maintain the required temperature inside the cargo box, regardless of weather conditions, transport can be carried out without obstacles. It can be performed on the day of the order or at a later date. Deferred order transport consists of delivering cosmetics to us in advance or collecting them by us and delivering them on another specified date to one or more points,” explain OCS experts.
The company making such an order saves time and money because it does not have to collect and store cosmetics on its premises, which then have to be packaged and sent to the destination. Experts explain that for larger batches of cosmetics, transport can be carried out on pallets within a set deadline.
Cosmetics logistics – the role of traceability
Logistics solutions offered by operators allow for 24-hour transport of cosmetics to many points throughout the country, maintaining the required temperature conditions and tracking the route of cargo. This is a sign of the times, it is becoming increasingly important that many manufacturing companies already have the ability to trace products in the supply chain, the so-called traceability. This solution is very beneficial for businesses in the event of any irregularities or damage because it enables them to reach a specific batch of product and withdraw it. It, therefore, facilitates a reaction, but only when a crisis situation has already occurred.
“This happens often when a given, defective product has already reached the customer. In addition, it is not certain how many of the goods have been damaged. In such a situation, the whole batch is very often subject to preventive withdrawal, which of course increases the manufacturer’s losses,” explained in a press statement Konrad Uliński, marketing & product development director at SKK.
Uliński also points out that the most commonly used way of handling and controlling the supply chain does not allow for efficient verification of their quality at any time in the process. The only exception is the manual opening of a selected item or logistic unit.
“In addition, it strongly limits the ability to assess the quality of products at the key point when they are accepted for sale in the shop and to determine when storage or transport anomalies occurred,” adds Konrad Uliński.
In the next part you will read about storage, means of transport and other tools used in the distribution of cosmetic goods.