Don't Let the Holiday Rush Get the Best of Your Supply Chain Management Strategy

Published : October 17, 2014

holiday-presentsIt seems like the holidays sneak up on us every year. Summer ends and, before you know it, there’s only a few short weeks of shopping days left. In fact, it happens so regularly that the mad dash to get everything done as the holidays approach has become a traditional part of the seasonal festivities. It’s not so bad if you’re a consumer. Sure, it’s stressful and hectic to get all the Christmas shopping done in time, but the holidays take an entirely different flavor of urgency for retailers.

You simply can't afford to let the holiday season sneak up on you. Why? Because those holiday season orders probably represents a good portion of your yearly profits.

In 2013, consumers spent $12.3 billion at brick-and-mortar stores on Thanksgiving Day and Black Friday, says Business Insider. During those same two days, retailers saw $1.946 billion in online sales. Black Friday is followed by Cyber Monday, the day when consumers who couldn't find what they wanted at the Black Friday sales hit their computers and start their holiday spending in earnest.

And that's just the beginning. Holiday spending continues right up until Christmas Day.

Good News, Bad News

All this spending is great for businesses. It means you’re in for a jump in sales and an influx of revenue. That's the good news. The bad news, however, is that this increase in sales will impact your supply chain.

Processes that are more than adequate at any other time of the year may well be pushed to their breaking point during the holiday shopping frenzy. And the time to worry about your supply chain's capacity is not the day before Thanksgiving. It's right now.

You need to take a look at your supply chain management and determine if it's ready for the holiday-shopping surge.

How to Avoid Costly Mistakes

Is your supply chain ready for the holidays? Here's a short checklist that can help you answer that question.

  • Start early. Don't wait for the holidays to plan for the holiday shopping rush. Compare last year's holiday-order figures with your non-holiday averages. This will give you a rough estimate of the percentage of increased shipping and warehousing capacity you will need for the holiday season. Then take some concrete steps to meet that increased demand.
  • Add staff. Shipping giant UPS is planning to add 90,000 to 95,000 seasonal employees to its staff this year to handle what it is calling an "e-commerce-driven holiday shipping surge." And UPS only delivers the packages. Your business may need extra hands to help with more than just packing and shipping. You may need extra staff to help with production and to man your customer service and order centers, as well. Consider adding some seasonal staff before the holiday season starts.
  • If you're not outsourcing, it's time to start. If outsourcing your order fill isn't already a part of your supply chain management strategy, it might be time to consider it. A third party fulfillment and logistics provider will not only be able to increase your seasonal shipping capacity, it will also be able to scale back appropriately when the seasonal rush is over. This means you'll be able to meet your peak customer demand without being left with expensive fixed assets that will not be utilized eight or nine months out of the year.
  • Don't quit too soon. For consumers, the holidays may end on New Year's Day, but for those in retail, the season lasts a bit longer. There will still be some last minute orders to ship, and possibly returns and exchanges to process. Don't let your staff stand down until everything is well and truly back to pre-holiday status.

The holidays are a magical time, but you can't trust your supply chain management to magic. Take a hard, honest look at it now, and take the steps needed to ensure that deficits in your supply chain don't put a stranglehold on the success of this year's holiday season.

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Topics: Supply Chain Logistics

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