Cosmetic Packaging: Supplier Selection

Cosmetic Packaging Supplier selection of partnerships involves identifying, evaluating and ultimately contracting with suppliers. This process requires significant financial resources with the expectation of developing an efficient supply chain that yields a return on investment. The key to success is that suppliers must offer high value.

Supplier Selection Process

Step 1: Identify potential cosmetic packaging suppliers

Step 2: Request information about their packaging products and related services

Step 3: Define contract terms

Step 4: Negotiate

Step 5: Evaluate supplier and award contract

Step 6: Monitor supplier and deliver

Selection Process Overview

This selection process attempts to streamline cosmetic packaging so that each component of the supply chain emerges with a win in cutting costs while maximizing profits. In order to make this vision a reality, the firm must survey the industry and consider the most efficient packaging suppliers. By requesting information from vendors about their packaging products and related services, comparisons and evaluations can be made. The list of candidates then narrows, leading to final selections.

The partnership stage then emerges, leading to working out contract terms, negotiations and ultimately final contracts. From there the firm should monitor the efficiency and productivity from the supplier through the delivery process.

Important elements in the selection process need to include a sharp focus on support, consistency, coverage and sufficiency. Activities between vendors must support the firm's manufacturing and marketing goals, while components are compatible with each other. At the same time the supply chain strategy must cover all important areas of concern while sufficiently meeting all goals.

Why Lean Principles Matter

The beauty of the cosmetics industry is that it is one of the most unregulated major industries in the United States, although it faces stricter regulations in other countries. That means manufacturers, suppliers and marketers already have an advantage from the beginning to concentrate on developing a business model with high profit margins.

Keeping costs low is essential to achieving impressive margins. The lean principle eliminates wasted time and expenses from the equation, but does not sacrifice quality. Every component must be thoroughly scrutinized to reduce losses or inefficiencies in the delivery process. Ideally, vendors within the chain are able to sufficiently interact with the firm to make ongoing refinements. Some of these factors include:

speed and accuracy of delivery
safety measures are executed to reduce damaged packaging
reliable delivery is critical
emphasis on value-added services
strong communication and collaboration between vendors

Quality, delivery and costs each play a vital role in cosmetic packaging. The evaluation process should be ongoing so that the company can keep improving its supply chain strategies. There should be built in flexibility and scalability to account for design changes in packaging to meet market demands.

Goals For Success

minimize material costs
manufacture in plants capable of high volume output
work toward becoming an integrated organization
provide best possible service to achieve customer satisfaction
minimize lowest delivered cost
conserve as much working capital as possible
develop accurate and reliable demand forecasts
strive to be a leader in quality and industry knowledge

Conclusion

Building a supply chain for a cosmetics firm mirrors the same selection process found in multiple industries. Packaging must comply with industry standards while meeting the goals of each vendor within the supply chain. This costly process demands a precise selection process due to the high cost of supply chain evaluation. That's why careful analysis must be made so that the firm does not burn its entire budget on repeated evaluations. In the end, contracts should only be negotiated with components that contribute to greater value than the sum of the supply chain's parts.