How to Prevent Bottlenecks in Your Holiday Supply Chain
September 12, 2018
Although many consumers are still trying to pretend that summer isn’t over, retailers and wholesalers are already preparing for the biggest rush of all: the holiday season.
In fact, if you haven’t started stocking up on Santa hats and gingerbread spice, you may already be too late. Preparations have to start early. The rush is stress-filled, but totally worth it.
The holiday season brings in about 30% of retailers’ annual revenue, if not more, requiring businesses to up their game by a hundred percent. Last year, US holiday sales amounted to $680.4 billion, 19% of all annual retail sales
Increased demand and the general overload of all logistics systems across the industry creates bottlenecks that may result in severely delayed shipments
It’s easy to see why it’s important for your business to ace the holiday season. But, for most of us, it’s easier said than done.
There are so many unknown elements in the process, including predicting demand, preparing inventory, and managing a long and overloaded supply chain that by the time Santa glides down the chimney, business owners wish for nothing but a vacation (not a chance, though, with Boxing day just around the corner).
One of the major issues wholesalers and retailers face is running a smooth and effective supply chain during the peak of the holiday season. Increased demand and the general overload of all logistics systems across the industry creates bottlenecks that may result in severely delayed shipments.
Identifying bottlenecks ahead of time is crucial if you want to keep your supply chain running effectively over the holiday season.
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How To Identify & Eliminate Bottlenecks in Your Holiday Supply Chain
Before you can perfect your supply chain, you have to make sure that your business’ inventory and warehousing solutions match the expected demand.
Unless you have a crystal ball that can tell you exactly how much you’ll need from which types of products, you’ll have to rely on guesswork. Or rather, forecasting.
Sales forecasts help you predict future sales. While it’s not set in stone and your predicted numbers will most likely be somewhat different from actual ones, you definitely need a good forecast to prepare your inventory for the holiday rush.
Once you have your inventory all ready to go, you can start examining your processes. Look at what happens at your warehouse/store and watch out for possible problems. There are several stages in warehouse handling and shipping that can typically cause bottlenecks (unless you’re prepared).
Although this may sound basic, it’s really important you optimize the organization of your warehouse. Devise a storage system that corresponds to your packing process.
Help your pick and pack lines prepare their work by storing your inventory in the most logical and easily accessible way. Saving a few seconds here and there will add up and at the end of the day. You’ll find significantly more assembled packages all ready to be shipped.
Pick and Pack Lines
The capacity of your warehouse’s pack stations is limited. The holiday season brings a rising daily volume of products to be packed, which can cause major delays. Your employees keep rushing about as an ever growing pile of products looms over their heads waiting to be packed.
At the end of the day, you’re stuck with frustrated employees, disgruntled clients, and a growing backlog of products to be handled or shipped. Luckily, you can prepare your handling lines to avoid this scenario.
The holiday season brings a rising daily volume of products to be packed, which can cause major delays
Your forecasts can help you determine the actual capacity your pick and pack lines will have to handle. Based on your data, you can reorganize your stations, or install temporary pick and pack workstations to help deal with increased demand.
If you offer gift wrapping to your customers, you need to prepare for it. Create separate stations for each type of gift wrap and make sure you allocate enough time and resources to each station. Placing an item into a gift box requires significantly less effort than gift-wrapping an amorphous object.
Needless to say, your products won’t pack themselves. It’s quite likely that your core staff won’t be able to handle the increased volume so it makes sense to hire temporary help for the holiday season.
Don’t leave this to the last minute. Untrained and confused temps won’t help eliminating bottlenecks, they may even make them worse.
Make sure you leave ample time for onboarding and training. Let experienced employees help new ones get into the rhythm of tasks. Once they know the drill, they can start working on their own.
Quality and Productivity
Believe it or not, keeping employee morale high is a very important part of eliminating bottlenecks. Frustrated and unmotivated workers won’t do their best to keep your supply chain smooth and effective.
Keep morales up by treating your staff (even temporary workers) fairly. Offer them incentives (like bonuses easily paid to their bank accounts) for doing their best and listen to their suggestions. Don’t expect them to work under less-than acceptable conditions with subpar equipment, or amid hazardous circumstances.
Pick the Best Service Providers
When it comes to identifying bottlenecks in your supply chain, there’s only so much you can do. After all, once the products are out of your warehouse, it’s your shipper’s responsibility to get them to your customers.
Therefore, it’s really important to pick the best service providers. Whether it’s logistics, payments, or any other service you may need, your brand image depends on their performance. Make sure you have business partners you can trust, so that your customers can trust you.
With a smooth supply chain and reliable business partners all ready to do their best, you may even start enjoying the holiday season.