In addition, by taking manufacturing in-house, Reflect gains the ability to further ratchet up its gross margins by controlling virtually every link in its supply chain, from upfront marketing through manufacturing and distribution, Zelikovsky said. We're working with a much tighter and much better-integrated supply chain. Supply chain inputs range from packaging goods to raw materials necessary to turn formulas into finished beauty products. Simply ignoring the power of reaching the consumer directly is no longer an option. And while the technology to do small-lot, customized manufacturing is complex, the biggest challenge isn't technical but related to those channel and branding issues, Rogers said.
Manufacturers are good at branding products.
Now they have to learn how to brand relationships. In addition to the new plant, Reflect is in the process of opening up new distribution and customer care facilities, both located in Cincinnati. Having both facilities in the same location lets the company cross-train workers to meet peak times flow on the loading dock or the call center. The distribution center is part of the customization process as well, letting Reflect marketers tap CRM systems that can add personalized labels and even marketing materials to packages as they head out the door. I've talked with senior executives in auto, apparel, consumer goods, that are putting a lot of time and energy into understanding and implementing mass customization.