Prepared for the peak season?

Sep 01, 2009 9:30 PM  By

If you do the bulk of your business in the fourth quarter, your peak season volume is bearing down on you right now. The good news is that there is still time to at least soften the blows. It doesn’t have to be a chaotic mess.

The best-run operations spend all year planning and preparing for peak season. But for now we’ll focus on short-term, low-tech strategies and tactics that can be implemented before it hits the fan in a few weeks.

For starters, you need to anticipate every risk and over-compensate for it. Do everything you can to stack the deck in your favor. That means staffing, training, expanding hours, getting extra equipment — everything.

The first task is to conduct a quick review of each operating area. Anything that’s even slightly sticky now will most likely become a major bottleneck in higher volume.

By anticipating what areas are going to be hit the hardest, you can make an extra effort to avoid that pain. The most common problem areas include phone order entry and e-mail management in the contact center, and packing and replenishment in the warehouse.

When it comes to staffing up, don’t just add labor: The best results usually come from closely studying the process to determine how it can be modified or supplemented to streamline the work. In peak periods, this often means dividing the workload into specialized tasks.

What tasks can you improve by finding opportunities to do specific pieces separately or differently? For example, in the warehouse, create dedicated packing stations for small orders, and separate easy single-line orders into separate, larger batches. Find those areas with sufficient opportunity to apply a different, specialized approach.

Don’t bring in all of your season staff at the same time. A large group of untrained staff arriving just as volume goes through the roof typically leads to a rash of errors and excessive demands on managers and team leaders for questions and corrections You want seasonal staff to be functional — not just present — when the pressure ramps up.

To accomplish this, bring in staff on a staggered, progressive schedule. Make the investment to start bringing in the first waves early — maybe even in the next few weeks. This way they will not only be more productive, but often will be able to help answer questions for the next groups.

In the contact center

Get your new seasonal hires viable in a shorter period by limiting the specific tasks they will be performing (for instance, order calls, catalog requests, order status). Then develop a downsized training program that is specific to those tasks. Several clients have shortened their “on-boarding” process from two weeks to three days with this approach.

You can supplement this limited training by assigning several floating “super-agents.” These floaters are typically experienced reps who are assigned to do nothing other than roam the floor of the call center ready to help new staff as questions come up.

Results are best when several floaters rotate the task for a few hours at a time. Provide some sort of flag system for new agents to call the floater, such as raising hands or holding up little flags or placards.

If you do not already have a partnership with a third-party service to provide after-hours and overflow call coverage, you should. Yes, there are challenges, but the coverage is worth it.

Several companies have negotiated optional extra coverage into their contracts: When actual call volumes exceed the projections provided to the third party, the client has the ability to “purchase” additional reps for the day at a flat fee. Since most vendors preschedule staff to an account or pool based on projections, this arrangement works for everybody.

You need to focus on utilization, or the percentage of time an agent is on a call. Many clients have enough reps in the seats, but they lose calls and productivity because those reps are spending too much time doing things other than taking calls, such as e-mail, faxes or visiting the water cooler.

This is common in peak season as fatigue sets in from the relentless call volume. You need to keep reps on the phone during their scheduled phone coverage. Utilization in well-managed centers during peak season is typically in the range of 65% up to an extreme of 80% in large, busy centers. Here’s how to keep utilization where it needs to be during peak season:

Make sure you measure and communicate utilization to agents. Divide and conquer tasks during peak season. While a one-agent strategy often works well during slower times of the year, it frequently leads to poor service levels during peak.

Minimize the noncall tasks assigned to agents during the periods they are scheduled to be on the phone. Have other dedicated groups doing the noncall work, and periodically give agents a breather by rotating them off the phone for noncall work.

Manage e-mail: E-mail requires the same organization skills and production management as any other function. It usually takes longer to answer an e-mail than a phone call, and customers expect a fast response — often four hours, and no more than 24.

At a minimum, make sure you have an automatic response system in place, with a realistic timeline for response., so that every e-mail gets an immediate acknowledgement. Suggest that customers call if they need a more immediate response, and suggest good times to call.

In the warehouse

Packing is typically the most labor-intensive part of the process, and the most likely to backlog. Devise ways to take pressure off conventional packing.

Here are a few suggestions to keep things moving:

Speed stations: Dedicate several packing stations to handle nothing but small, simple orders. They are equipped with only bags or one or two small box sizes. These stations can be staffed with your least experienced people because there are few complications.

Next Page: DO YOUR HOMEWORK, SHARE THE KNOWLEDGE

Speed line: One of the most successful techniques we see is to break the packing process into a small assembly line along a gravity conveyor. One person forms boxes at the start of the line (using a bottom-sealer to tape the bottom), and feeds boxes to the packer working in the middle of the line. They drop the items into the box and apply the shipping label. (Feed it with all the orders that will fit in that box size — usually manually selected.)

The boxes are then forwarded to an inline taper and manifest station operated by a single worker. Productivity for a speed line is significantly higher than conventional packing — often double — and has the added benefit of reducing volume from the conventional shipping line. Speed lines can be set up in as little as one to three weeks.

Prepack: If you have items that often sell by themselves, invest the time now to pack some portion of them into shipping cartons and store them in the picking location ready to go. If it applies, pack some in pairs.

Similarly, all ship-alone items should be fully packed upstream, so all the shipper has to do is apply the shipping label. Do as much work as you can upstream.

Slotting: This is the time to make sure top-selling items are located in high-capacity locations, and that you have some sort of exception report available to flag those items that are replenished more than once per week.

Make sure you have sufficient staff available to stay on top of replenishment — preferably on a second shift or early morning shift. Replenishment during picking operations rarely works.

Some clients assign double locations for the fastest moving items. In addition to increasing capacity, it helps to prevent traffic jams around the busiest areas.

You can set up a mini-warehouse — often as little as half of one row — with a second, duplicate location of the top-selling items. Many companies can fill over 20% of their orders from these “quick-pick” areas when slotted with the right items. And you can maximize productivity by setting up a small pick-and-pass process in which the orders move through this small zone on a small gravity conveyor, and are picked right into a shipping box.

On the shipping front, have your primary carrier staging a trailer at your dock all day. There is a huge advantage to “fluid loading” your packages directly onto the trailer: It eliminates the handling that goes into building, staging and moving pallets onto the trailer at the end of the day.

And finally, negotiate with your carrier for the latest possible pickup you can get. In some cases couriers will still do an earlier pickup and come back later for the residual. Even if later pickups don’t make the sort, it allows you to keep shipping and keep up your package count.

Bill Kuipers (kuipers@spaidekuipers.com) is a partner in Spaide, Kuipers & Co., a provider of multichannel operations management and information technology solutions.

DO YOUR HOMEWORK, SHARE THE KNOWLEDGE

You cannot be prepared for a peak season unless you have some idea of expected weekly volumes and top items. Keep pestering everyone until you get at least reasonable projections that will allow you to plan your staffing needs. You can’t possibly staff effectively without them.

It’s just as important to get projections for top items to make sure you have appropriate bin capacities set up — nothing cripples a warehouse as quickly as falling behind in replenishment.

Make sure you have a simple and concise status report in place that tracks basic production for each department — specifically, the number of orders or transactions received, the number completed, the number still open and, ideally, the throughput per labor hour. Watch the “still open” column closely to make sure that number stays well under one day’s work, based on your recent completion rate.

In addition to reviewing the status with your lead staff, make sure it is prominently posted where every associate can see it. Get everyone focused on the numbers.

If you can break it down to an individual or group level, so much the better. One client now goes as far as posting group and individual numbers at every break. When communicated properly, an informed and motivated group will automatically raise the bar. — BK