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  December 8th, 2022 | Written by

Here’s What It Takes to Be Agile During Global Supply Chain Disruptions

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Despite the hindrances the pandemic put on it, the global beauty industry is worth an estimated $511 billion. That persistent growth continues despite an environment where global manufacturing has declined, traffic has piled up, and workforces have been slashed. While still thriving, beauty brands are just one of many industries left vulnerable to these disruptions — and this may be why you’re waiting months for an item to restock or why store shelves lay empty.

To be sure, most industry supply chain issues aren’t just pinned to one specific barrier. They’re a combination of factors, from ingredient sourcing and manufacturing to employment shortages and importing issues. Supply chain disruptions have impacted countless brands’ packaging and ingredient needs, resulting in companies having to scale back on new product launches, change their timelines, and alter their order quantities. In some cases, brands are running out of product and being forced to order much larger quantities than usual to ensure they’re fully stocked to meet customer demand.

Thus, supply chain management in every industry requires agility. Companies that plan accordingly and use fresh data to adjust their methods and procedures are the ones that will continue to thrive.

How Industry Supply Chain Challenges Impact Business Operations

The challenges faced by the cosmetics industry in the supply chain mirror those of just about every other industry and have the potential to be endless. Mismanaged supply chain and fulfillment issues impact business operations in a plethora of ways.

First is the obvious result — companies having too much or too little of the products they need. Then, there’s the aforementioned pushing back (or complete forgoing) of product launches due to delayed packaging or ingredient shipments caused by those backed-up supply chains.

Companies such as Meraki Organics Inc. had to list items as “sold out” on its website due to such ingredient shortages and packaging issues — not great timing, considering it was around Black Friday and Cyber Monday. Peak selling seasons are integral for companies, so it’s extra important to plan during those times for any supply chain hiccups. A lack of proper preparation could seriously impact revenue in negative ways.

A way to properly plan ahead is to list out all materials needed to create and package your products. Keep a keen eye on the news to monitor supply chain issues so you can anticipate delays and shortages before they directly impact your company. For example, during peak Covid times, there was a shortage of glass bottles since they were in high demand for vaccine producers. This inadvertently affected many sustainable beauty brands that rely on glass for their products.

Supply Chain Strategies to Stay Ahead of the Curve

The industry supply chain can create many challenges for just about any business on earth. For companies to stand the test of time and thwart any curveballs thrown their way, they must have a comprehensive plan to deal with problematic supply chain issues. Here are three tips for leaders in all industries that rely on steady manufacturing and an efficient supply chain on how to do just that.

  1. Get proactive.

Track product sales and usage to forecast when you need to put in orders to restock. Sales cycles will vary across different companies, so it is important you track your company patterns closely so you can identify instances when you’ll likely require more product than usual.

To do this, choose a time frame that makes sense for your business. It could be over the course of a month, quarter or year. Then, choose what you will measure. Are your clients buying more skincare-related products or makeup? Are they buying moisturizer with sunscreen all year round or only during the sunny months?

As you are keeping tabs on your sales, simultaneously track factors that may be affecting your final conclusions, such as inflation on raw materials, internal changes, new competition in the market, etc. Tracking outside factors will give you a better grasp on what is affecting the purchases of your consumers and help you better forecast for the future.

Sales predictions can be a good indicator for investors when making important business decisions. It is always best to estimate your numbers conservatively — the old “underpromise and overdeliver” mantra. Keep in mind all the factors that can impact your products’ sales, such as industry competitors, economic variables, material issues, and overall market indicators.

  1. Work with a transparent contract manufacturer.

Companies are increasingly realizing the importance of tracing their products in the supply chain. This requires strong relationships with the manufacturing companies you work with. It is crucial that your CM be transparent with you about what is being delayed and for how long, as this is vital for your planning purposes.

Remember the two Ts: traceability and trust. When you have trust, you can trace — and thus you can plan appropriately when unavoidable delays arise.

  1. Have a backup plan.

If a product or collection can’t launch or will be delayed, it’s crucial to have a Plan B (or C) in place. You never know what issues might arise and catch you flat-footed when urgency is key.

Let’s say your CM is low on an essential ingredient. Make sure this partner has other vendors it works with so you have other options at your disposal. That way, if they run out of an ingredient, they can try to source it from elsewhere. Different products obviously require different technical skills from research and development and different machinery for production.

As company leaders, you must prepare for crises such as shortages and industry supply chain issues. Your ability to manage these supply chain issues not only helps your company stay afloat but it also further solidifies your reputation in a market where consumers are looking for reliable brands. Utilize these tips to give your brand breathing room when supply chain challenges inevitably affect your business.

Mark Wuttke is the Chief Growth Officer at Cosmetic Solutions Innovation Labs, a globally recognized contract manufacturer and innovation partner that offers the operational excellence of large-scale contract manufacturers with the proactive leadership and flexibility to help brands grow on their terms.