Retailers are fond of promoting “Christmas in July” sales. Catalog operations experts prefer Christmas planning in July — gearing up for the holiday season rush by assessing seasonal staffing needs, reconfiguring the warehouse, and preparing for what is the busiest time of year for most consumer marketers.
After all, “the marketers that plan the best are also the best at executing operations during the holiday season,” says Don Derewecki, executive vice president of Woodbridge, NJ-based operations consultancy Gross & Associates. With that in mind, here’s a calendar of sorts to get you ready for the season ahead.
JULY
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Work with your transportation companies and vendors to handle the additional inbound and outbound volume of merchandise. It’s also crucial to make scheduled deliveries of your fall/holiday products. Particularly when gearing up for the fourth quarter, you want to avoid dock congestion delays, says Irwin Langer, former director of operations at Burlington, VT-based cataloger Gardener’s Supply Co. If you don’t get your goods unloaded off the truck on time because there’s a wait for a loading dock, you may be hit with a truck detention fee by the trucking company.
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Before you start your seasonal hiring, study the relationship of labor market/labor availability and prepare to react. If you’re in a competitive labor market, you may want to offer incentives such as flexible hours.
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Check the inventory status of your packaging and packing materials, keeping in mind any merchandising changes in the forthcoming season. For instance, if your holiday catalogs feature a greater portion of larger or bundled items, you might plan to order more of your larger corrugated boxes than you would in other seasons.
AUGUST
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Line up your flow racks, shelving, and bin locations in the warehouse based on what you’re expecting to sell and how much. Work with marketing and merchandising managers to determine the larger SKUs and to estimate which items will likely be the fastest movers so that you can prepare a detailed plan for storing the seasonal inventory in the distribution center.
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With human resources, create a strategy for hiring and training seasonal temps. When determining how many staffers you’ll need, check with the marketing and merchandising departments regarding sales forecasts. You want to be sure to hire enough workers because “your service levels during the holidays should match the service levels at other times of the year,” says Doug Fukishima, director of customer service transformation for New York-based cosmetics marketer Avon. But hiring too many workers is a waste of money, plus you might have a tough time retaining staff if you don’t have enough hours for them to work.
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If you haven’t already done so, order any additional materials and supplies, such as corrugated and dunnage, required for the peak period. And if you offer gift-wrapping, be sure to order the appropriate quantities of materials and set up a dedicated work station for gift-wrapping to eliminate a bottleneck in the packing area.
SEPTEMBER
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Create and enforce a meeting schedule with managers in key departments such as marketing and merchandising. Use the first meetings to solve potential problems before they happen. For instance, suppose you plan to sell 100 SKUs from China in the fall/winter catalog. What if the items don’t arrive in time — how will you handle a back-order situation? Does marketing or merchandising have a backup supplier or an acceptable product substitute? Encourage staff to anticipate problems and envision potential solutions.
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If some of the holiday inventory will be stored off-site, prepare a shuttling plan and line up the trucking resources required.
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As the initial fall orders start coming in, review your product slotting strategy and revise if needed. Make sure the fast-moving products are stored logically to minimize the amount of handling of the item and reduce the employee’s walk time, says Gross & Associates’ Derewecki. You have to be flexible in case a “C” product suddenly turns into an “A” item.
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Take the time to train the front-office staff on some of the back-end procedures. While at Internet marketer Toysmart.com, former director of operations Wayne Teres taught the front-office staff how to read picking tickets and to pack orders. “That was the best thing we ever did,” Teres says, since the office workers could help get holiday orders out the door in a pinch.
OCTOBER
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Check on progress of hiring results. Have you hired enough seasonal employees? Or might you have to ask your tried-and-true employees to grab more hours and more shifts? Thirty days before your fall catalog drops you need to bring the seasonal supervisors on board and train them; 15 days before the fall catalog drops you should bring the first wave of hourly staffers on board and train them.
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Watch for emerging warehouse safety issues, says Steve Harris, a Lincoln, VT-based operations consultant. For instance, if you’re starting to see back injuries occur because a bulky or heavy object is located in an awkward place in your warehouse, remedy the situation now. The potential for injuries will only get worse once order volume increases.
Managing the process
Keep in mind that now — let alone September or October — is not the ideal time to overhaul your distribution center or fulfillment practices. You need to plan any major changes at least a year in advance, according to most operations experts.
“A director should be thinking in terms of a year from now, a supervisor should be focused on a month from now, while a worker should be free to operate within the moment,” says Langer, who retired from Gardener’s Supply Co. in June.
Once the holiday order crunch is under way, at least half of a manager’s time is typically spent putting out unanticipated fires, so be available to key subordinates and help them deal effectively in crafting solutions. While an effective manager cannot live by a rigid schedule — especially during the holiday season — he should try to be predictable in terms of work habits and whereabouts.
Aside from pitching in to help fulfill orders on occasion, “the [operations] director’s job is to walk around, listen, observe, and take notes,” Langer says. Look for merchandise affinities, such as products that go together, and other “little efficiencies that can cut costs,” he says. You should also constantly monitor inventory and activity levels and adjust resources as necessary.
One final piece of advice from Langer: The holiday catalog customer has no sense of humor, “so make sure that you do — especially when you’re dealing with a stressed system.”