April 6, 2021

Cosmetics Industry & Its Complete Supply Chain Challenges

In this blog post, we’d like to touch on the cosmetics industry and its relationship with shipping and supply chain logistics. While there are a variety of industries we service, we think cosmetic companies face some significant interesting challenges. With various product offerings, numerous colours and shades, liquid and solid compounds, exclusive yet sensitive ingredients, and more, cosmetics logistics in itself is truly unique in its own right. On one hand, new and innovative products that spark new global trends make companies take a closer look at their supply chains. On the other hand, distributors need to transport products quickly in order to meet demand, especially to reach global markets.
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There are numerous brands all over the world that consumers desire, love and trust. Because of this, the common trend today is importing cosmetics from other countries due to consumer trends and unique product makeups e.g; products that contain exclusive ingredients found only from certain regions around the world, such as the wild nature of Arctic Lapland, minerals from the Dead Sea of Israel and Jordan, hemp oils from Canada, to cosmeceuticals that come from South Korea - with a plethora of benefits from sun protection, skin brightening, anti-wrinkle properties, and much more. The cosmetic industry goes far beyond just chromatic lipsticks, perfumes, toiletries, and aromatic smelling soaps and hand creams. It is a behemoth industry that is a $532 billion sector of the economy and is experiencing rapid growth with projections reaching over $390 billion globally by 2024, according to Forbes.

However, as extravagant as this rapid growth is, cosmetic and beauty brands are also faced with many vulnerabilities sensitive to their product delivery lifecycle across the supply chain. Quality control and supply chain management plays a fundamental role to meet supply and demand, visibility into logistics and transportation however is a common major obstacle. 

Cosmetic companies that do not pursue innovative solutions in their supply chain to protect their products’ quality, to  prevent spoilage, damage or loss, end up facing lower revenues globally and become less profitable than their competitors who ultimately capture more market share in such a dynamic fast growing industry, yet alone the satisfaction of end consumers. This provokes the need for change for cosmetic distributors and logistics operators providing services to this sector. 

Whether a cosmetics company large or small sells to the mass market, globally or domestically, specialty retail, or via e-commerce, taking transportation and logistics considerations into account is critical to easing any perpetual supply and demand challenges and supply chain vulnerabilities.

Giving the beauty industry a supply chain facelift

For the cosmetics industry, an efficient supply chain is crucial for having a competitive advantage and for managing the requirements of retailers correctly, while at the same time face the many challenges inherent to the supply and demand. In addition, consumers also demand greater transparency and accountability from the brands they buy from. Because consumers expect high quality raw materials, more natural, organic ingredients, brand owners owe it to their customers to provide transparency and guarantee of high quality products. To give the right experience to the customers, companies must ensure the quality of their products which involves monitoring the temperature of sensitive products that are stored in a controlled environment throughout the lifecycle of the product until it reaches the end customer. However, for brands to meet these expectations, it is not an easy task in a world of global supply chain inefficiencies, and the cosmetic industry is no exception.

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, (amended in 2013), which places particular emphasis on market safety. Every cosmetic product placed on the market must, therefore, meet certain requirements (this can be applicable globally). 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, light, and shock. All this also affects the rules of conduct for suppliers and carriers, as well as the requirements placed on them. In fact, in the logistics chain, a list of mandatory requirements must 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. 

Temperature control compliance

Most often, cosmetics are specific and unique due to their composition and are sensitive to certain temperatures and can get damaged due to change in properties of ingredients, which often means the need for special transport conditions. It is also quite common for cosmetic shipments to be handled by multiple stakeholders and delivered long-distances by several (sometimes all) transportation methods which include: road, air, sea, and railway freight, as well as possible exposure to various climate and weather conditions, to dry stagnated storage spaces along the shipment’s entire journey. 

Often referred to as controlled temperature, failure to observe temperature fluxuations (for both raw materials and finished products) may mean the loss of physical and chemical properties of the goods, or in other words, product spoilage. Inadequate preparation, reflecting incomplete information about shipments and shipping requirements, or lack of shipment condition monitoring capability is a significantly costly and preventable cause of logistics inefficiencies, particularly for the cosmetics industry. Cosmetic items need to be maintained and monitored throughout transit in the supply chain. One way of doing so is through detailed temperature data logging when shipments are being transported. There are many solutions on the market, such as IoT enabled devices to track temperatures and humidity, however, some solutions are simply more suitable and scalable for cosmetic shipments than others. See for example Logmore’s agile QR data logger solution with cloud-based platform for shipment condition monitoring.

Shipment conditions & traceability down to the finest detail

It is becoming increasingly important that many brand manufacturing companies not only have the ability to trace their products in the supply chain, the so-called “traceability”, but equally important, to trace shipment conditions down to the finest detail. 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 cosmetic product and withdraw it, or at least able to see at which point of the transit journey something went wrong with the shipment, it’s conditions and to take action based on insights available.

“To thrive in the current business climate, quality control managers and third party logistics (3PL) must work towards an intelligent supply chain, starting with better understanding and monitoring their shipment conditions at all times throughout every step of the journey with actionable insights easily available to them. Information technology that enables granular shipment condition monitoring and tracking capability is essential for not only cosmetic companies, but for supply chain intelligence as a whole,” says Lauri Erik, SVP of sales at Logmore.

Condition monitoring for cosmetics

Condition monitoring involves keeping an eye on various conditions surrounding the product journey of your cosmetic items at every point in the supply chain. Freight monitoring vendors like Logmore make this process very easy by providing the right tools and software necessary to keep an eye on products throughout their shipping journey, whether they travel by plane, train, truck, cargo boat, or car.

Condition monitoring will often provide insight into a variety of shipping conditions in real-time, including:

  • Moisture and humidity
  • Temperature
  • Sun or light exposure, as well as ambient light
  • Bumps, shocks, or tilts
  • Temperature
  • Location

Cosmetics that are considered fragile or sensitive can be damaged by nearly all of these things, but they are most susceptible to mishandling. A condition monitoring platform will allow businesses to closely monitor the condition of their freight at any point during travel, including loading and unloading the product.

Some logistics platforms like Logmore provide temperature, humidity, impact, shock, and tilt indicators (to name a few) that can be easily attached to the inside or outside of boxes or pallets in order to indicate if a particular piece of cargo has been handled roughly, loaded incorrectly, or jostled because of terrain or road issues. This is very handy because it lets you find and solve damage problems and hold those responsible accountable.

Conclusion

For the cosmetics industry, an efficient supply chain is vital for having a competitive advantage and for managing the requirements of retailers correctly and help face the challenges inherent to the supply and demand. Quality management of cosmetics is equally important for all parties involved throughout the supply chain.

Cosmetics are specific and unique due to their composition and are sensitive to certain temperatures that can get damaged due to change in properties of ingredients, which often means the need for special transport conditions. For the producer and distributor, product spoilage, defects or damage can cause major problems and reputation damage.

As for all sensitive cosmetic items, we highly recommend investing in a temperature monitoring method that allows you to track the quality of your products from the moment you get your hands on it, to the moment it leaves them, be the latter towards reaching the end consumer.

Logmore’s condition monitoring solution allows you to recognize patterns in inefficient routes, malfunctioning cold equipment, or brings an extra layer of security to your cosmetics. Interested in shipment condition monitoring? Contact our sales here!

The author Matthew Roblin is a Canadian marketing freelancer and student living in Finland.