Case Study – Leaders Cosmetics
Leaders Lands in US
Leaders Cosmetics landed in America in August 2015. Its timing could not have been better.
The Seoul-based company had been manufacturing skin care products for more than a decade. But K-Beauty—consumer shorthand for health and hydration skin care products from South Korea—was not yet a big thing in America.
Happily, Leaders set up operations in Los Angeles as K-Beauty gained traction among American consumers. Six months later, it was hot. Leaders USA was mentioned in more than a few articles about the trend. The company was selling to wholesale and b2c customers from all over the country, fulfilling orders from three warehouse/packing facilities.
The company was selling on a well-earned reputation for making great sheet masks—thin, face-shaped sheets made from cotton, biocellulose, or coconut gel and infused with natural ingredients—along with other bath and skin products, all formulated by a group of dermatologists.
Beneath the Surface
But having a great product was one thing. Getting the processes to optimize its inventory was something else.
“It’s really simple: off the bat when I started, I noticed we were running a huge variance in our inventory,” says Jason Guerin, Logistics Specialist. “We had multiple warehouses with different ten-packs, 20-packs, and single units spread haphazardly across all our locations.”
Guerin says the company had been taking orders for different packages of products, but only tracked their inventory under a single SKU. It proved very difficult for the company to assemble their packaging to fulfill particular orders.
“We did not have a Bill of Materials (BOM) to account for the different case packs and what went into those case packs,” Guerin says. “There was no way to really check where the case packs were located.”
Without a system that included a BOM, fulfilling wholesale orders for various packs of a product created havoc in the warehouses.
“If we had to sell 10 in a pack, we had no way to check where the 10 pack boxes were located,” he says. “When one of our warehouses ran out, we had to hire a person to go through the other two warehouses to find the packs we needed to fulfill the order.”
The company had been using spreadsheets and TradeGecko at the time, but fulfillment was a headache, and quite wasteful, and those problems didn’t make Leaders’ retail trading partners very happy.
Leaders had been overselling on their eCommerce side due to the lack of visibility into their warehouses. It cost time and money to manually verify available stock.
Leaders needed a system that allowed them to track items in different units of measure, as well as individual items and packaging materials.
“We didn’t need a big manufacturing ERP system,” says Guerin, who has experience using ERP packages for previous employers. “SAP even out of the box is too expensive for a company like ours. We didn’t really need everything that SAP did, anyway. We just needed a system that had more than basic inventory capability. I Googled ERP and BOM and web integration and came up with Cin7.”
Cin7 and its BOM capability gave Leaders real-time stock availability of multi-packs and units sold across its wholesale and eCommerce platforms.
It eliminated the need for Leaders to lease more warehouse space than it actually required.
“That in itself was an amazing reduction in overhead,” Guerin says.
And with full view of available stock and packaging, the company no longer employs a person to rush around from one place to another in search of the correct package to fulfill orders.
“Cin7 has really saved me time and effort when it comes down to tracking things,” Guerin says. “I have more free time to do more important things. It’s given us the ability to be sure that our buyers know where our goods are and that we can deliver to them in a timely manner.”