Cosmetic products have formed part of consumers’ daily lives for decades, many of which enrich their physical and emotional health.

As a result, certain indicators exist within the consumer goods market in Mexico that show encouraging growth in the personal care and beauty products sector, implying the following situations:

• Interest in improving personal image.
• Regulatory agencies lifting restrictions on marketing and importation of anti-dandruff, anti-bacterial and anti-cellulite products, etc.
• Increase in elderly population, representing a population group especially interested in skin care.

Certain data are presented below which allow us to identify the importance of this sector.

 

“Being present is more than just being there.”

Companies are making aggressive efforts to gain market points: they dedicate significant percentages of their Budget to optimizing their Value Chain and to Marketing to guarantee top of mind awareness in their consumers, and they invest time, money and effort in publicity to motivate consumer loyalty, but what good are these commercial and advertising wars if the product is not available on the shelves?    As Malcolm Forbes stated: “Being present is more than just being there”… you have to be there in the moment and manner most convenient for the consumer.

Certain questions must be answered by industry executives in order to know when to evolve their strategy and thus be able to conserve the premises of every organization – have the product in the quantity, time and form– required by the clients:

• Is our current infrastructure sufficient to sustain this growth rate?
• Are our competitors reaching new areas we have yet to explore?
• Do we need to open more distribution centers? With what capacity? Where? How will we guarantee their efficiency?

The BAO (Business Analytics & Optimization) solutions offer support in answering these questions.

Territorial expansion does not necessarily mean the search for more capital makes shareholders nervous. One important point to consider for personal care products, the demand for which increases according to the prognoses, is to identify strategic locations for Distribution Centers that guarantee prompt deliveries, reduced costs, optimized inventories and, as a result, an increase in customer loyalty.

The type of analysis required to determine if the infrastructure will be capable of maintaining the current service levels with an increased sales volume forecasted in coming years falls in the field of Prescriptive Analytics, which uses optimization methods such as linear mixed integer programming, genetic algorithms and metaheuristics.

It is important to point out that the location of Distribution Centers should not be isolated from other elements in a company’s supply network, due to which it is recommended that in formulation of a solution, the distribution network be analyzed using the following methodology:

Prescriptive Analytics serve to drive the business model based on a strong, transparent and easy to measure foundation, making the company a much more intelligent competitor.

Prescriptive Analytics: Development of Business Solutions

At Sintec, we create alliances with strategic partners and develop internal capacities to offer leading analytical solutions for our clients.

Conclusions

Prescriptive Analytics, which includes one of the BAO categories, is essential for the successful territorial expansion of a mass production goods company in a market as competitive as the Personal Care and Beauty market that also seeks to be permanently available for consumers.  The implementation of this tool may represent considerable savings for the company and continuous profits in the long term.