Avoid Winter Warehouse Woes with Peak Holiday Season Planning

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While the dog days of summer are upon us, the peak holiday season is top of mind for retailers as they prepare for another strong sales season.

And as many more consumers opt for online shopping versus in-store – making more than half of their purchases online – the stakes are even higher for one vital area of the retailer’s supply chain: Order fulfillment.

For ecommerce sales, this back end of the supply chain is arguably the most significant as it’s the last impression a retailer can essentially make on a consumer. The expectations here are high.

But with the right plan and tools in place for your warehouse, you can deliver on these growing consumer demands with ease. The following are some of the most important factors to consider when priming your warehouse systems for the peak holiday season. 

Gain Inventory Intelligence

First and foremost, do you have a handle on how much inventory you’ll need? Remember, your goal during the holidays is to fill stockings, not be left out of stock. According to IHL Group, out-of-stocks cost retailers $129.5 billion annually.

Now is the time to evaluate the hot-selling SKUs and look at order projections to ensure you have enough of those best-selling items available for holiday shoppers – without over buying.

This is where cloud-based software for warehouse management comes in handy. It gives you real-time visibility into inventory levels, so you can plan and anticipate when replenishment is needed. It’s beneficial from a warehouse space utilization perspective as well. An advanced WMS can help you set up strategies for bulk, replenishment and forward-pick locations where the warehouse space could be under-utilized.

Put Your Processes Through Their Paces

Many warehouses muddle along just fine for eight months of the year but find that the pressure of peak holiday season volumes causes usual processes to break down. The go-to solution here is often to bring in more people to get orders out the door, but given current labor shortages it’s an expensive option. A best-of-breed WMS will drive efficient, scalable processes, allowing you to handle more volume with minimal additional resources.

Know When You Need Backup and When You Don’t

Labor represents as much as 60% of operating costs in most businesses. Your WMS software should also help you get a better handle on how many people you need to staff your warehouse during peak season.

Using a WMS with labor management capabilities can help you monitor your team’s current performance levels and determine whether more or less staff are needed and when they’re needed – helping you run your warehouse as efficiently and cost effectively as possible.

Also important to point out, if bringing on additional seasonal staff, an intuitive WMS cuts down training time and maximizes productivity.

Realize the Potential of Improved Reverse Logistics

Beyond inventory and labor management, another peak season pitfall retailers often find themselves struggling with is reverse logistics. Last year, UPS projected holiday shoppers would return 1.3 million packages in a single day.

Having a plan and the right type of warehouse system in place is imperative to properly and cost effectively processing an influx of returns. According to a recent BI Intelligence report, retailers that implement an effective reverse logistics process can recapture up to 32% of total product cost.

The best policies won’t work, however, if they aren’t supported by the right technology and tools. Managing a strong reverse logistics operation requires a healthy set of technology-driven automated procedures and systems that capture and evaluate increasingly important data sets from every step in the process.

Plan for Success

The height of holiday shopping doesn’t have to be a stressful burden on your warehouse, but begin your planning now. Concentrating on improving inventory, operational processes, labor management and reverse logistics will lay the groundwork for successful warehouse operations and ultimately, happy holiday shoppers.

Chris Anton is Executive Vice President and Head of Global Sales Operations for Snapfulfil

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