THE SUPPLY CHAIN

The core areas of the client supply chain, involved with the formula­tion, material collection, production and supply of compound fra­grances, are illustrated in Figure 5.2, with the key links between company departments shown. It should be emphasized that this diagram is not definitive. Each fragrance house displays a shape and structure that best suits its own marketplace, and there is a more complex interplay of communication than sketched here.

The scope and breadth of raw material requirement has already been mentioned in Chapter 3. Synthetic aroma chemicals, barring major oil crises, do not normally give problems in terms of stability of supply, relatively stable costs and reliable quality. Natural products are a different story, with the price and quality of an essential oil being very

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Figure 5.2 General structure of an international fragrance company around the supply chain (adapted from Curtis and Williams, 1995)

much related to ‘acts of God’, or the weather. Anyone who has some comprehension of the vagaries of a stock market centred on buying and selling futures in crops such as coffee and citrus fruits can multiply the concerns a thousand-fold to cope with the complexities of balancing stock, ensuring consistent quality and delivering finished perfume compounds on a competitive basis to the end client. The supply chain has two natural facets:

—Supply of standard orders on a regular, planned basis to clients.

—Supply of a newly-won perfume compound into the marketplace for the first time, and initial build-up of supply and demand balance set by the pull of market acceptance.

A fragrance house is like a bespoke tailor, supplying client-specific products which, for multinational clients, become essentially their own. There is, however, also an ‘off-the-peg’ service or ‘fast-shelf’ service, where the resource commitment, pricing demand and fast turnaround of response dictate a different method of interpretation.

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