Overview of the Cosmetic Products Industry
The cosmetic products manufacturing space is highly dynamic with the extensive use of innovation to meet the growing demand for luxury and prestige produce lines among the audiences. Companies in the consumer packaged goods industry are facing the need to reformulate their product offerings and introduce active ingredients to meet the needs of the health-conscious consumers. Increasing per capita income and growing awareness about beautification are the factors that are sustaining the growth of the cosmetic products manufacturing industry. In addition, the growth of the cosmetic products industry can also be attributed to the radical shift toward organic products.
Although the changing lifestyles and varying climate changes contribute to the growth of the cosmetic products manufacturing sector, some of the factors that may hinder the growth of the industry include.
- Keeping up with the evolving beauty standards: The competition in the cosmetic products industry is relatively high with the influx of both multinational and regional players. Homegrown players need to design brand-building strategies to respond to the frequent changes in the outlook of the customers. As the consciousness among the consumers increases, brands should keep innovating to stay relevant and address the growing needs of the populace.
- Innovations: With the drawbacks associated with the use of certain chemical compounds in the manufacturing of cosmetic products, prominent companies in the CPG industry are focusing on innovations to develop herbal and natural beauty products. The rising need for more organic products also involves high investments in research and development.
- Regulatory challenges: At present, cosmetic products are subjected to stringent regulations from the Federal Food, Drug and Cosmetic Act and the Fair Packaging and Labeling Act. The stringent government regulations are compelling major companies to eradicate issues pertaining to misbranding and adulteration.
In this challenging environment, companies in the CPG industry should ensure that they provide transparency and traceability in their supply chain process and mitigate any risk pertaining to supply chain efficiency. Organizations can leverage the use of effective supply management solution to profile the most suitable suppliers and reduce risks associated with production delays and ensure consistency in their product offerings.
The Business Challenge and the Solution Offered
A renowned cosmetic products manufacturer wanted to understand the latest industry trends and identify the key suppliers in the cosmetic products manufacturing space. The cosmetic products manufacturer wanted to keep track of the supplier performance and understand the strengths and weaknesses of their suppliers. With the help of a supply management solution, the cosmetic products manufacturer wanted to profile the most suitable suppliers from a pool of suppliers and engage with the right suppliers to reduce the time-to-market for the products.
To identify the pricing models and improve their operational efficiency, the procurement experts at SpendEdge carried out extensive research across prominent stakeholders in the CPG industry. The procurement experts also compiled information across a wide array of secondary sources such as trade shows, industry forums, and company presentations to assess the performance of the suppliers.
The supply management solution offered by SpendEdge helped the cosmetic products manufacturer understand the latest trends and profile the most suitable suppliers to reduce procurement costs and excess inventory costs. The cosmetic products manufacturer was able to maintain a customer-focused business to deliver product and service optimization and ensure the desired quality to the customers. The supply management solution also assisted the client in mitigating production delays and increasing the time-to-market for the products.
Fundamental questions answered in this supplier profiling solution include:
The supply management solution offered by SpendEdge helped the cosmetic products manufacturer identify the most promising suppliers to minimize leakage and maverick spend. The client in the CPG industry was able to efficiently manage their supplier database and segment suppliers based on criticality.