No silver bullet will get you through the peak season by itself
The U.S. Air Force trains and equips pilots with the strategy that the only way to prepare for any challenge is to stack the deck as much as possible in your favor by out-training, out-equipping, out-thinking, and out-gunning any potential adversary.
It doesn’t take much imagination to apply this strategy to operations management in a business with significant seasonal volumes. Yet, season after season, most of us get clobbered with heavy backlogs, jammed-up facilities, and inflated costs. Too often, we do little more to combat the problem than throw more people and more hours at the volume. Here are some suggestions that might help you go into this season with a little more firepower.
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Set up a “projection task force.” Nothing is more important than keeping tabs on the anticipated workload. Put together a “swat team” from marketing, product management, customer service, and distribution to meet at least every two weeks to review current activity and update the projections as necessary for the next three-week window.
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Install performance measurement. The most common breakdowns in seasonal crushes come from failing to track key indicators of performance. You might as well drive blindfolded. Management and staff alike must know at all times what the current workload, production, and carryover is for each department. You can accomplish this with a one-page status report. Perhaps the most important column on the page is carryover. By watching it closely, managers can reallocate resources as soon as a potential backlog appears.
The hardest part of installing a status report is determining where the data will come from and who will collect it. Put this report in place now, therefore, before the season starts, so that all the kinks are worked out when the volume hits. It does little good if the report gets stuck in everyone’s in-box. Your managers must actively use it and depend on it. Share the numbers with your staff. It’s amazing what they’ll do for you when they know the score.
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Plan a staffing program. Once you know how many people you need to handle projected volumes, you actually have to find them. Put some creative thought into what shifts you will need filled and where to find the best seasonal workers. I strongly recommend hiring more part-time staff, because they give you more flexibility. You can tailor the hours more closely to when you actually need them. Consider an early morning shift instead of or in addition to setting up a second shift.
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Set up a third-party call center for overflow. The call center represents your lowest margin for error. You must answer the phone when the customer calls. To help expand your coverage capabilities, establish a relationship with a third-party service bureau to handle a variable percentage of your inbound calls. The best arrangements are when the outsourcer always receives some modest percentage of calls (even during non-peak seasons) to keep him familiar with your products and calls. The percentage is increased as volume increases. Using a “call allocator” provided by your phone service provider or the vendor allows a variable percentage of inbound calls to be routed directly to the vendor through your carrier. You can change the percentage either through a local PC or a simple phone call to the carrier. Allocating only simple “order-taking” calls to the vendor will leave more experienced staff available for more complex calls.
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Set up a separate data entry group for faxes, mail orders, and e-mails. In the off-season you can sometimes get away with having phone reps enter mail and fax orders between calls, but in peak season that will compromise service for both. You should have a separate group that handles nothing but non-phone orders. The good news is that these transactions are slightly less time-sensitive and can be done during off-peak times of the day or even on a second shift. Also, straight fax/mail entry generally requires less training and is a good step in training future phone reps.
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Slot the warehouse. A top priority for every distribution manager must be to determine the most appropriate picking location and bin size for every item. Locate the most popular items closest to the packing areas or conveyors. Don’t create traffic jams by putting all your fastest movers close together, however. Make sure the bin size is adequate to contain enough stock to last at least one to two weeks. You should monitor item activity to make sure the most active items are in the right place and in the right-sized bin.
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Pre-pack common ship-alone items. Packing is invariably the biggest bottleneck in the distribution process. Anything you can do to take pressure off the packing area is worthwhile, even if you incur some incremental expense. One of the most effective techniques I’ve seen is pre-packing as many items as possible. Also, consider setting up as many “ship-alone” items as possible. Your system should batch these separately so they can be given to a single picker with a pallet jack or a stock-picker who just slaps a label on the box and takes them right to the shipping dock for scanning. Look, Ma, no packing!
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Set up bulk pick stations. A few bulk-picking stations can handle your super-fast-moving items and/or backorder releases. A bulk pick station can be as simple as a pallet of the specified item placed right next to a packing station. The order is filled and packed on the spot, with no travel involved.
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Set up “speed line” packing stations. In addition to your conventional packing stations, also set up several stations exclusively for smaller, easier orders. This will allow you to increase your overall package count without backlogging the slower, more complicated orders.
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Keep good notes. No matter how well this season goes, there will probably be plenty of room for improvement next year. Keep weekly notes of some of the specific problems that you encountered, and also of actions you took that worked out well. Hold an “operations summit meeting” at some point between peak seasons to review the projections and requirements for the coming year. This is where your notes from last year come in really handy.
Silver buckshot
There is no silver bullet, no single action that will get you through the peak season by itself. The cumulative effect of a series of well-planned and coordinated initiatives, however, will make all the difference in the world. Use every tool you have. The most potent weapon in your arsenal is an aggressive, unwavering will to win.
Bill Kuipers is a principal of Spaide, Kuipers & Company. The firm provides operations management and IT solutions for the direct marketing industry, with offices in New Jersey and Philadelphia. Kuipers can be reached at (973) 838-3551, or [email protected].