Building a D2C personal care brand is a very promising venture, though rapid growth often reveals weaknesses in a company's order processing and warehouse operations. Indeed, personal care products demand not just prompt packing and shipping, but constant availability on the market. The demand for products such as sanitary pads, intimate hygiene kits, and wellness products can vary widely between 20,000 and 30,000 kitting units.
In such a case, conventional supply chain methods are ineffective, and the absence of current stock information makes the situation even worse, leading to cases of stock-outs and order cancelations exceeding 10% and SLA violations exceeding 30%. In order to ensure the stability of sales and boost the brand reputation in the market, D2C personal care brands choose modern shared fulfillment centers and modern warehouse tools that allow restructuring the logistics system of personal care items.
The Root Causes of D2C Personal Care Supply Chain Bottlenecks
1. Variable Daily Kitting Capacity
Unlike shipping individual items, personal care subscription and bundled offers require advanced kitting and bundling processes (the process of assembling individual stock keeping units into consumer-ready kits). When the number of kits fluctuates anywhere from 20,000 to 30,000 units, the stable structure of warehouse staffing creates either a situation of overstaffing during quiet periods or a failure to dispatch (dispatch delays) during busy days.
2. Stock-out Cancellation because of Phantom Inventory
When the inventory management system in the warehouse does not immediately process stock levels across all channels, inventory details go astray (shifting). Customers make purchases of goods that seem to be available, but the warehouse realizes the absence of stock during the picking. This can lead to cancellation rates of orders exceeding 10% and losses of revenue.
3. Occurrence of Breaches of Service Level Agreements (SLA)
Delays in product picking and manual mistakes, and unsuitable layout of a facility result in over 30 percent of orders violating the delivery SLA agreement. Being a very fast-moving hygiene and personal care market, lateness leads to significant customer loss.
The Strategic Solution: Shared Infrastructure & Process Standardization
1. Flexible Shared Warehousing and Variable Workforces.
By using a shared fulfillment center instead of traditional warehousing, companies can take advantage of a greater amount of space without having to endure hefty ongoing costs. Shared facilities let logistics managers combine human resources, all necessary equipment, and available storage space together in order to get variable daily kitting capacity of 20,000-32,000 units, thus using only the paid-for space.
2. Technology Implementation
Following the established operating procedures ensures complete auditing of all or most processes, including:
- Intake and Quality Control : Accelerated quality control allows certain quality checks to guarantee that no faulty products make it to storage.
- Storing Technology : Products that are in high demand are placed close to the packaging stations to make the delivery of the goods easier.
- Belt Assembly : The assembly line is improved and enhanced, making the packing process more effective.
3. Daily Cycle Counting and Employee Training.
To make sure that all discrepancies in the inventory list are eliminated, one needs to introduce strict counting:
- Daily cycle counting : Ongoing counts of stock help identify discrepancies that could influence the orders.
Key Results Achieved
Choosing to work with technology-based 3PL and supply chain management companies such as Edgistify can help personal care companies avoid problems related to manual processes and instead use automated and data-driven fulfillment methods.
- 0% Revenue Loss Due to Out-of-Stock Items : Perfect inventory accuracy leads to zero stock-out cancellations.
- 99.9% Service Level Agreement Compliance within 48 Hours : Delivery occurs quickly from the moment the client pays until it arrives.
- 15% Decrease in Labor Costs : Flexible labor models create more efficient use of human resources, which means no overtime payments or any idle time.
- Kitting Capacity : Companies can now benefit from kitting possibilities of more than 32,000 units produced per day during peak sales.