Detailed Abstract on Cosmetics Logistics

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Global Cosmetics Industry

The cosmetics industry represents one of the most profitable and fast growing market segments in the United States in the past 50 years with cumulative sales of over $32 billion in 2005. The top players in the industry are L'Oreal followed by Procter & Gamble, Unilever, Shiseido, Johnson & Johnson, Avon, Revlon, Estee Lauder, Coty Inc, and Elizabeth Arden. The industry product categories are identified as cosmetics, hair care, skin care, sun care and perfume, which are developed, marketed and manufactured by powerhouses such as L'Oreal.
The five trends affecting the logistics operations of the cosmetics industry are centralization of distribution, innovation in packaging, evolution of new distribution channels
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In the process of moving from raw material to getting finished goods to customers, products move around quite a bit. RFID tags use wireless signals and small devices attached to each product. The information is stored and displayed in a convenient location. This technology allows for more effective tracking of products as they move throughout the supply chain, resulting in fewer lost goods and better security (Prance). Tracking products will also allow the company to see how many components and products are wasted. More information about their supply chains will allow companies to make more improvements to their logistics systems.
Goods worth over $100 billion are returned to retailers in the United States annually. In fact, according to Devangshu Dutta, director of a supply chain solutions company, "nearly 20% of everything that is sold in America is returned" (Roy). In the past, companies would throw out most of these products. Now companies are beginning to realize the large losses they suffer because of these returned products. With reverse supply chains, companies can recycle, refurbish, or reuse products or components to save millions. Estee Lauder used to throw out almost $60 million worth of its products every year; after implementing reverse supply chain, the company has lowered its amount of destroyed products by almost half.

New Distribution Channels for Men's Cosmetics
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