Brandon Stallard and Ingmar Korstanje, TPS Logistics02.01.16
Optimizing transportation and logistics management is important in any industry. But when it comes to the health and beauty supply chain, that importance becomes heightened. In many cases, supply chain and logistics efficiencies can make the difference between making and losing money.
From razor thin margins to tight timelines and first-to-shelf pressures, and from small delivery windows to seasonal/holiday scheduling and complex inventory and planning considerations, health and beauty is extremely sensitive to the logistical demands of transportation and delivery. Even the relationships between retailers, manufacturers and transportation carriers can have a significant impact on pricing and delivery details.
The challenges, costs and consequences of health and beauty transportation and logistics are significant, making the efficiencies afforded by a streamlined supply chain and proven logistics platform potentially profound. For health and beauty executives and decision-makers, understanding those challenges, appreciating the value of a trusted logistics platform, and becoming familiar with the basic tips and best practices for optimizing the health and beauty supply chain should be a top priority.
Systems and Specificity
Transportation is such a defining burden on the health and beauty cost structure that general information about delivery schedules and shipment costs is insufficiently precise. This is an industry where manufacturers want to be able to get down to a single unit on a pallet, acquiring a SKU-level understanding of how each and every product’s delivery burden impacts cost and profitability.
Happily, the best providers of transportation logistics services can do just that, deploying sophisticated transportation management systems that can track, analyze and record the details of each and every individual product the same day it goes out the door. Depending on the capabilities of the transportation and logistics partner, that information may even be available in what is virtually real time, through detailed daily tracking and reporting. Access to that kind of granular detail provides a deep and nuanced understanding of transportation costs, and information that can be used to identify inefficiencies, highlight opportunities, and help make strategic decisions about pricing and shipping.
Connection and Complexity
Working with an experienced transportation and supply chain logistics company does more than just passively track products and shipments. The best third-party logistics experts provide guidance and insights, and, perhaps most importantly, access to powerful transportation management systems that are capable of full integration with client enterprise resource planning (ERP). With detailed and timely information about every product coming out of the warehouse and/or being loaded onto a truck on any given day, those systems can then engage in dynamic routing and delivery possibilities—not only determining the most efficient routes and timing, but also optimizing loads and consolidating shipments for different products headed to a similar area of the same final destination. Such systems rely on complex algorithms to sort though literally millions of possibilities to create smarter consolidated loads and determine the most efficient delivery strategy. For companies that may be working on tight margins, trimming down the transportation burden can make a meaningful difference in the bottom line. And, for high-end brands and products, or for specialty channel providers, speed matters even more: being first-to-shelf can make a defining difference in an extremely competitive industry.
Tight Windows
Because health and beauty retailers tend to have extremely rigorous receiving guidelines and tight delivery windows (mandating a delivery arrive within a designated 15-minute window, for example), transportation and logistics management plays an important role in avoiding the disruption and potentially costly mistake of missing a specified delivery window. In some cases, missing that window could force a delivery to be pushed back by a week.
Beyond the inconvenience, the costs associated with having full shipments sitting idle can be prohibitive–not only for the additional logistical expenses and lost revenue, but also for the financial penalties that some retailers may dispense. With that in mind, it is clear why real-time track-and-trace capabilities, and the ability to ensure that shipments hit the right delivery window every time, is enormously beneficial.
Relationships Matter
To reduce congestion at stores and direct-sort facilities, retailers sometimes limit the number of trucks and specify the carriers that can be used. This dynamic gives the carriers significant leverage, which can lead to less-than-ideal cost and service compromises. In that context, established carrier relationships become critical, and the assistance of a full-service logistics provider (who has those relationships and deals with volumes sufficient to exert a counterbalancing pressure on carriers) can give health and beauty manufacturers the negotiation leverage they need to push back in a non-competitive environment.
Understanding Cost Structures
Another reason why highly granular detail is important, with respect to the transportation costs of individual products and shipments, is because it helps avoid the hidden costs that arise when members of the sales team–who often have sizable incentives built in to their pay scale–may make excessive compromises in order to move product. Knowing who is bearing transportation costs, what those costs are, and avoiding situations where transportation costs become an added incentive to close a deal or compete a sale, goes a long way to minimizing waste and unnecessary expense.
Overseas and Overcharges
Shipping considerations only become more complicated when dealing with overseas deliveries. This is an industry where many expensive and high-end products are manufactured and shipped from abroad, and making sound strategic decisions about when to ship and when to wait is critically important. A high-quality transportation and logistics platform can calculate the best possible times to ship products from overseas, balancing inventory/storage costs versus transportation costs, and accounting for product pricing and durability, and seasonal and holiday calculations (what is selling and what isn’t, and when to ship).
Applying the sheer logistical brawn and penny-pinching exactitude of sophisticated systems first designed and honed in the crucible of the global automotive market to the health and beauty space can convey a tremendous competitive advantage. There are so many manufacturers in this competitive and rapidly growing industry, from big brands to specialty and boutique providers, that the ability to not just move faster, but also move smarter, is critical for brands that want to thrive in a crowded marketplace.
The best providers of transportation and logistics management can help health and beauty professionals understand what is happening in the board and what is happening on the shipping dock, providing big-picture perspective and strategic detail. Along with powerful systems and services, the result is a process that avoids waste, efficiently deploys resources, and saves significant amounts of time and money in the process.
The Authors
Brandon Stallard and Ingmar Korstanje of TPS Logistics, a non-asset based, full service logistics management provider based in Troy, Mich. For more information, please visit www.tpslogistics.com.
From razor thin margins to tight timelines and first-to-shelf pressures, and from small delivery windows to seasonal/holiday scheduling and complex inventory and planning considerations, health and beauty is extremely sensitive to the logistical demands of transportation and delivery. Even the relationships between retailers, manufacturers and transportation carriers can have a significant impact on pricing and delivery details.
The challenges, costs and consequences of health and beauty transportation and logistics are significant, making the efficiencies afforded by a streamlined supply chain and proven logistics platform potentially profound. For health and beauty executives and decision-makers, understanding those challenges, appreciating the value of a trusted logistics platform, and becoming familiar with the basic tips and best practices for optimizing the health and beauty supply chain should be a top priority.
Systems and Specificity
Transportation is such a defining burden on the health and beauty cost structure that general information about delivery schedules and shipment costs is insufficiently precise. This is an industry where manufacturers want to be able to get down to a single unit on a pallet, acquiring a SKU-level understanding of how each and every product’s delivery burden impacts cost and profitability.
Happily, the best providers of transportation logistics services can do just that, deploying sophisticated transportation management systems that can track, analyze and record the details of each and every individual product the same day it goes out the door. Depending on the capabilities of the transportation and logistics partner, that information may even be available in what is virtually real time, through detailed daily tracking and reporting. Access to that kind of granular detail provides a deep and nuanced understanding of transportation costs, and information that can be used to identify inefficiencies, highlight opportunities, and help make strategic decisions about pricing and shipping.
Connection and Complexity
Working with an experienced transportation and supply chain logistics company does more than just passively track products and shipments. The best third-party logistics experts provide guidance and insights, and, perhaps most importantly, access to powerful transportation management systems that are capable of full integration with client enterprise resource planning (ERP). With detailed and timely information about every product coming out of the warehouse and/or being loaded onto a truck on any given day, those systems can then engage in dynamic routing and delivery possibilities—not only determining the most efficient routes and timing, but also optimizing loads and consolidating shipments for different products headed to a similar area of the same final destination. Such systems rely on complex algorithms to sort though literally millions of possibilities to create smarter consolidated loads and determine the most efficient delivery strategy. For companies that may be working on tight margins, trimming down the transportation burden can make a meaningful difference in the bottom line. And, for high-end brands and products, or for specialty channel providers, speed matters even more: being first-to-shelf can make a defining difference in an extremely competitive industry.
Tight Windows
Because health and beauty retailers tend to have extremely rigorous receiving guidelines and tight delivery windows (mandating a delivery arrive within a designated 15-minute window, for example), transportation and logistics management plays an important role in avoiding the disruption and potentially costly mistake of missing a specified delivery window. In some cases, missing that window could force a delivery to be pushed back by a week.
Beyond the inconvenience, the costs associated with having full shipments sitting idle can be prohibitive–not only for the additional logistical expenses and lost revenue, but also for the financial penalties that some retailers may dispense. With that in mind, it is clear why real-time track-and-trace capabilities, and the ability to ensure that shipments hit the right delivery window every time, is enormously beneficial.
Relationships Matter
To reduce congestion at stores and direct-sort facilities, retailers sometimes limit the number of trucks and specify the carriers that can be used. This dynamic gives the carriers significant leverage, which can lead to less-than-ideal cost and service compromises. In that context, established carrier relationships become critical, and the assistance of a full-service logistics provider (who has those relationships and deals with volumes sufficient to exert a counterbalancing pressure on carriers) can give health and beauty manufacturers the negotiation leverage they need to push back in a non-competitive environment.
Understanding Cost Structures
Another reason why highly granular detail is important, with respect to the transportation costs of individual products and shipments, is because it helps avoid the hidden costs that arise when members of the sales team–who often have sizable incentives built in to their pay scale–may make excessive compromises in order to move product. Knowing who is bearing transportation costs, what those costs are, and avoiding situations where transportation costs become an added incentive to close a deal or compete a sale, goes a long way to minimizing waste and unnecessary expense.
Overseas and Overcharges
Shipping considerations only become more complicated when dealing with overseas deliveries. This is an industry where many expensive and high-end products are manufactured and shipped from abroad, and making sound strategic decisions about when to ship and when to wait is critically important. A high-quality transportation and logistics platform can calculate the best possible times to ship products from overseas, balancing inventory/storage costs versus transportation costs, and accounting for product pricing and durability, and seasonal and holiday calculations (what is selling and what isn’t, and when to ship).
Applying the sheer logistical brawn and penny-pinching exactitude of sophisticated systems first designed and honed in the crucible of the global automotive market to the health and beauty space can convey a tremendous competitive advantage. There are so many manufacturers in this competitive and rapidly growing industry, from big brands to specialty and boutique providers, that the ability to not just move faster, but also move smarter, is critical for brands that want to thrive in a crowded marketplace.
The best providers of transportation and logistics management can help health and beauty professionals understand what is happening in the board and what is happening on the shipping dock, providing big-picture perspective and strategic detail. Along with powerful systems and services, the result is a process that avoids waste, efficiently deploys resources, and saves significant amounts of time and money in the process.
The Authors
Brandon Stallard and Ingmar Korstanje of TPS Logistics, a non-asset based, full service logistics management provider based in Troy, Mich. For more information, please visit www.tpslogistics.com.