In an FMN Online continuing professional education course, Supply Chain Management, Mark Rosenblum, Senior VP of Finance and Operations of Group Clarins, a manufacturer and distributor of cosmetics and fragrance, discusses how the company has implemented an efficient, cost-effective and customer-driven supply chain.

 

According to Rosenblum, one way that Clarins has created an efficient "back room" -- as the distribution center and process is commonly coined -- through technology Clarins created internally.

 

"One of the major strategic decisions we made is to make an investment in information technology and in our own information technology personnel. Our distribution center is very 'high tech' ... our staff has developed nearly all the software in our system in-house. By doing this, we've been able to develop a system that is very industry-specific, very responsive to our needs, and at the same time very efficient," Rosenblum explained.

 

The cost-effectiveness of the supply chain depends on a number of factors, said Rosenblum, but the key is to eliminate obstacles in the supply chain process in order to get the product into the customer's hands as quickly as possible. "Our emphasis is on customer service," he says, "and that takes precedence over inventory velocity," he said.

 

One major obstacle to a smooth supply chain process includes unsatisfactory "full shipment rates" (an accurate and whole shipment to the buyer without out-of-stocks or mistakes). According to Rosenblum, Clarins boasts a 99.3 to 99.6 percent full shipment rate and

 

Rosenblum and his supply chain management team attribute Clarins efficient distribution and low number of chargebacks (retailers' claim that an order was not properly filled) to the company's focus on the "back room" -- an area for potential cost-cutting methods that many companies tend to neglect.

 

"Done well, a good logistics operations and distribution system can be a driver of increased sales," indicated Rosenblum.

 

As a side note to the slow economy, Rosenblum advised that companies take advantage of decreased product demand and test their distribution centers for where improvements can be made.

 

Supply Chain Management, a multimedia CPE program now available with FMN Online and FMN Video subscriptions, further explores implementing an efficient supply chain process, including: