By now you should have your peak holiday season planning for this year well underway. If you’re behind schedule, there’s still time to implement improvements but you need to be prudent and not over-commit.
To help you be prepared, here are 13 critical considerations for improving peak holiday season operations and fulfillment processes this year:
Labor, Recruitment, Training
We have major concerns about the quality and availability of hourly labor for this peak holiday season. Based on last year’s review, what can you do differently in terms of advertising, recruiting and training? How can labor be used more efficiently? Where were there too many people or not enough people based on workload? How could scheduling replenishment in off hours free up congestion? Could a partial or a full second shift increase productivity? Can temporary agency labor alleviate problems? What improvements in training and procedures still need to be completed?
Create a Demand Plan
By now merchandise planning should be completed for this year’s peak holiday season. We expect your marketing department can give fulfillment the topline order plan by week and day. All your detail planning should sync with this plan so marketing and fulfillment are aligned. The number of returns can also be estimated as a percentage of order demand by week.
Simplify Workflow and Processes
Based on your post-season analysis from 2018, how can you process inbound receipts, customer orders and returns more efficiently? Temps and part-time workers may have never worked in your type of facility. Can the process be broken into multiple steps to make tasks easier and employees more productive? Can more skilled employees handle the complex tasks?
For high return ecommerce categories of products (apparel, shoes, electronics, etc.), peak holiday season is made worse by high returns coming in a few weeks after shipment. What can you do to simplify these processes?
Product Storage and Movement
There is limited time left to make changes to racking and material handling equipment, however, lead time on racking is eight to 10 weeks. You might get faster delivery in a shorter time frame for some rack components paying a premium. Get approval, get it ordered and on someone’s installation schedule pronto.
Third-Party Logistics as an Alternative
Time may be running out to get a commitment to implement a 3PL in time for peak holiday season. One of our clients started the evaluation process in January and has just signed with a very large 3PL. As a wholesaler they must start shipping in July, which will be tight. The 3PL may have to install at its site with new racking and faces the same lead time constraints.
Update Telephone Tree and Transportation
In case of a disaster or bad weather, updating the employee telephone tree and employee transportation plan is absolutely essential. Many companies offer employees rides to work during the worst weather to keep production up.
Testing System Changes
Set a drop-dead date beyond which new system changes will not be implemented. Lobby for systems testing by Aug. 15 to Sept. 1, if your peak season starts in mid-September.
Outbound Shipping
Are there things you need to do differently with carriers such as dropping a trailer and loading trucks? Can you extend pickup cutoff times? In conventional facilities with minimal automation, can you use expandable conveyors to load trucks? What bottlenecks can be eliminated?
Packing Materials, Other Supplies
Can vendors manage the supply inventory to benefit your operation? Can they store it offsite and reliably make resupply shipments to free up space?
Merchandise Availability
A key failure is not having merchandise available for fall/holiday promotions once the selling season starts. If there has historically been a problem causing back orders and out-of-stocks, what can merchandise managers do differently to improve the situation? Re-emphasize this issue with all vendors, detailing your objective of improving customer service. Can they follow up well in advance to be sure delivery dates can be met, including drop ship vendors?
Cross-Channel Processes
When we use the term cross-channel we mean transactions beginning in one channel like ecommerce and having implications for another like stores. Are all your processes cross-channel? Two examples are gift cards and returns. If you offer branded gift cards, are they redeemable in all channels? If a customer orders online, can it be returned to a store? Are there process issues that can negatively impact the customer experience? You still have time to eliminate these problems.
Develop a Plan
Time is short. Detail the tasks, get senior management and cross-departmental buy-in, assign responsibilities and establish start and end dates. Issue a status report weekly to all stakeholders.
Call a Consultant
Consider using a consultant to validate your plans, add senior experience and get tasks done that are behind schedule.
Peak holiday season can represent 60% or more of the annual sales and a higher percentage of profit. Not being ready can have a major impact on performance and results. Your main objective is planning and preparation that sets you up to deliver high service levels to customers within budget.
Brian Barry is President of F. Curtis Barry & Company