Warehousing for the cosmetic industry has its unique set of challenges. These are high value, temperature-sensitive products with high SKU depth and are prone to damages during transportation. Batch and expiry control are crucial to ensure that the products have enough shelf life when it reaches the stores or to the end customer.
Cosmetics products need to be stored in dust free and clean environment to make sure that the appearance of products is intact, and the gloss and freshness of product remain until they reach the end-user. A trusted 3PL partner should understand the intricacies of the cosmetic industry and design a warehousing solution while considering the below four factors:
1. WMS to track Expiry
When it comes to cosmetics, expiry control is of utmost importance. The longer the products stay in the shelves of warehouse, higher is the chance of product expiry as well as discounted selling due to short shelf life. In most cases, the primary reason of expiry related issues is not slower inventory turn but is loose expiry control.
The warehouse management system should be able to facilitate” First Expiry First out” based picking and highlight the near expiry products based on pre-defined logic. Timely identification of near expiry products helps companies to have better liquidation plan by utilising the stock as tester, display for promotional events or selling via online channels to cut short the wait time at retail stores.
2. Temperature sensitive storage
Some of the of cosmetic product categories are sensitive to high temperature and can get damaged due to change in properties of ingredients. Many of us have experienced melted lipsticks or lip balms in hot weather or due to prolonged exposure to sun. Some categories are more sensitive than others. Lip and eye products need temperature control whereas the nail products are mostly unaffected in hot weather
To give the right experience to the customers, companies must ensure that the temperature sensitive products are stored in a controlled environment throughout the lifecycle of product till it reaches the end customer.
It is important that your 3PL understands the products and has the right infrastructure required for warehousing as well as transportation of the products.
3. Product Safety & Packaging
Cosmetic brands place very high importance to the look and appearance of products. The primary packaging of cosmetic products is usually glossy and shiny and is prone to scratches and damages during transit.
The chances of return increases in case the appearance of the product is not up to the mark. In the case of products with fragile primary packaging like glass bottles, the secondary packaging done by 3PL becomes even more important. As most cosmetic products are in cream or liquid form, any spillage can damage the whole consignment.
Here also the product understanding comes very handy for the 3PL as the secondary and tertiary packaging is driven by the nature of product. On one hand, overdoing the packaging hurts the unit economies and on the other hand, inefficient packaging may lead to product spillage, breakage, and damage in transit.
4. Return Management
Product returns is a painful and yet unavoidable process for most retailers. The challenge is even bigger in cosmetic industry as the return ration is high and a significant percentage of return products are not moved to sellable inventory due to limited shelf life.
Investment into a good return management system, often part of a WMS is critical to track the return product back to its origin. The concept of serialisation is important here to track the product journey from manufacturer, warehouse, shipper, retailer/customer and back to the warehouse.
The investment in the system has good returns as it can reduce the returns by more than 10% by tracking down root cause on unit level. It also helps in putting the inventory back into the right sales channel at higher speed.
Efficiently designed warehousing solution is pivotal to an agile supply chain for cosmetic products. The right 3PL partner brings in the domain experience, industry best practices and technology to keep costs in control and manage inventory to maximise sales and minimise the losses due to rejection, expiry, or damage.
It is important to take the above four points in consideration to give competitive edge to warehousing for cosmetic products.
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