During this time when the coronavirus pandemic caused many businesses to close or slow down, you might have discovered some weaknesses and risks in your supply chain. You might even have new priorities.
As we all begin to ramp business back to full capacity, now may be a good time to take a look at your logistics and maybe revamp a few things to make sure your fulfillment plan is ready for a restart.
Planning and Managing Peak Returns Season
Overall, holiday’s sales this year appear to have been robust, with Mastercard reporting total retail sales were up 3.4% year-over-year for the period of November 1st to December 24th. Online sales represented 15% of the total, with total e-commerce sales up 19% over last year.
And now a new year is upon us and the flood of holiday returns has begun, with UPS estimating that 1.9 million return packages entered the UPS network on National Returns Day (January 2nd ). That figure represents a 26% growth in returns over 2018. The increase highlights the continual rise of e-commerce and the resulting surge in returns via delivery services.
So, with holiday sales booked and your attention now firmly set on managing peak returns season, let’s take a moment to identify areas you can audit this year to prepare for next year’s peak returns season.
Any company with a D2C ecommerce model is well aware of the increasing challenges of managing fulfillment, in particular, freight costs during the fourth quarter. Consumer shipping expectations continue to rise driven by the fulfillment benchmark being set by Amazon, Walmart, and other large D2C companies. Consumers are being trained to expect shorter shipping times with low, or no, shipping costs. Further increasing the complexity of managing fourth quarter fulfillment is the increasingly compressed online holiday shopping season driven by the expectation of 1 to 2-day shipping. In this article the focus will be on strategies to manage fourth quarter freight costs during this critical period while meeting your customer’s high expectations. In particular, we will focus on the key drivers impacting your shipping costs which includes, staffing, packaging, dunnage, freight negations, and communication.
It is easy to get spooked this time of year. The weeks leading up to peak season can be scary, but peak will be even scarier if you don’t have the right partner. The holiday season is almost upon us and customers are ready and will test the mettle of your supply chain. It’s time to iron out any holiday shipping and logistics frustrations and avoid unpleasant surprises of what is likely your busiest time as a business. Your vendor and, subsequently, your vendor management practices are your first line of defense against the three great customer reputation killers. Here's why solid, consistently performing vendors are worth their weight in GPS-tracked gold.
Efficiency isn’t just a business buzzword.Efficient production means making products without wasting materials, natural resources or man hours. Efficient facility management means running your business while reducing your energy costs and minimizing its carbon footprint. Efficient advertising means targeted ad campaigns that make the very most of your marketing dollars.
Moving your product from point A to point B is rarely a A-to-B process. As customers happily dive into their shipments, little thought goes to the intricate network behind the scenes that made it happen, but those same shipping solutions are likely a major concern for you. One of the most challenging aspects of shipment is the dual selection of mode and carrier. While it's tempting to lean on a basic freight quote to keep things moving along, you'd be doing yourself a disservice. Basic freight quotes are full of holes, and may not be meeting your fulfillment center's needs in a meaningful, consistent way.
There are three things you need to consider that are often missed.
Even if your fulfillment center doesn't have Santa's workload to contend with, they'll still have to work a little peak season magic to keep the peak influx of orders. Often customers are unavailable and gift-giving timelines are non-negotiable, your supply chain needs to be backed by a strategy that holds up to scrutiny and stress to remain viable. As with most supply chain planning, it's in your best interests to be proactive, not reactive, so here are a few last to-do list items to cross off before ecommerce marches into the busiest weeks of the year
A goal-oriented supply chain is a focused series of connected modules - raw materials to components, components to manufacturing and so on. When the initial approach amounts to what is essentially a collection of moving parts, it seems reasonable to apply solutions the same way: piecemeal. However well this may work for each individual module, that success is at the cost of a greater supply chain strategy - one that embraces a top-down approach and encourages that all-important trait of transparency. Considering today's increased demand for transparency from both the consumer side and that of your trading partners, it's not a facet your company can afford to let slip.
The holiday season is almost upon us and customers are waiting to test the mettle of your supply chain. It’s time to iron out any holiday shipping frustrations now to avoid unpleasant surprises of what is likely your busiest time as a business. Your vendors—and, subsequently, your vendor management practices—are your first line of defense against the three great customer reputation-killers. Here's why solid, consistently performing vendors are worth their weight in GPS-tracked gold.
Four Areas to Evaluate for the Best Supply Chain KPIs
It can be tempting to set a static goal and measure daily progress against it; however, in a climate that can change direction in a moment, your business practices can become outdated quickly. Warehouse key performance indicators (KPIs) are the best tools to guide actionable measures in afulfillment center. KPIs reflect the state of your efficiency on multiple levels.
Do you have the best supply chain KPIs for the job? The following four areas will help you start.
There may be times customer orders pick up throughout the year; however, in general, the fourth quarter is most demanding for a warehouse distribution facility. If you weren’t 100% satisfied with how last year’s peak season went, now is the time to examine your options to ensure you are providing the best solution to keep happy, repeat customers.
Before summer is in full swing, it’s time to figure out what part of your order experience didn’t function well last year and seek to find strategic improvements that are best for your business.
Peak season is a huge challenge for companies like yours, whether you manage it inhouse or have a 3PL that provides your order fulfillment. Effectively meeting the need throughout the year regardless of volume is something not every provider can do well.
Many business experts say that you should treat such a function as a type of customer service. Do it well, it can have a huge boost for relationship building and growing your brand. Do it poorly, and it doesn’t matter how great your product may be— customers are going to remember that experience when they think of your brand .g dock and then, eventually, to the customer's doorstep, packaging fulfillment is often one of the most overlooked and thereby dysfunctional parts of a business.
Despite the fact that your fulfillment team has a direct impact on consumer buying behavior and building brand loyalty, it’s likely you’re less concerned about developing a coherent supply chain strategy than you are about creating your next marketing campaign— even if you are pouring a considerable amount of money into operations.
Measurements — determining them, changing them, inferring from them — are a backbone of every industry. Whether the measure of success is something as simple as profit, or as complex as reducing the amount of time a product spends during its travels in the supply chain, having the right "ruler" is absolutely crucial. If you're using the wrong logistics KPIs, or endlessly tracking them for a future purpose that never manifests, you're not only wasting company resources — you're paying out an opportunity cost that could actually make a difference in your goal progression. In only three steps, you can clean up your approach to KPIs and maximize the value obtained from each one.
Even if your fulfillment center doesn't have Santa's workload to contend with, they'll still have to work a little holiday magic to keep the upcoming influx of holiday orders. As customers travel and gift-giving timelines become non-negotiable, your supply chain needs to be backed by a strategy that holds up to scrutiny and stress to remain viable. As with most supply chain planning, it's in your best interests to be proactive, not reactive, so here are a few last to-do list items to cross off before ecommerce marches into the busiest weeks of the year.
It's the nature of the supply chain professionals to feel a need to have contingency plans for their contingency plans and contingency plans for those as well. Designing and implementing a "tight ship" is more than a matter of pre-planning, however: Eventually, something unexpected will happen and even the best supply chain risk mitigation framework will bend in the wake of questions and uncertainty.
Good mitigation practice isn't necessarily about building a ship that's entirely waterproof, it's about knowing what to do and how quickly to do it when it springs a leak. Here's a few of the ways you can add more efficiency into your backup plans:
Your fulfillment partners are an integral part of your business, but to consider them a real part of your value chain initiative or support, you need to know what else they can do for your company. In short, their benefits should, whenever possible, become benefits to you as well—whether that be opening proverbial doors, banding together with your buyers for better pricing, or proactively researching and suggesting ways to tighten up your current fulfillment processes. Even in a situation where vendor A offers a better price per unit or service event than vendor B, that "smart bet" on A quickly becomes worthy of scrutiny if B can provide more opportunities to save money or boost efficiency.
In the world of fulfillment it seems more than ever speed is the goal. Modern consumers have a short attention span and a low tolerance for delay. In today's pick-and-click world of shopping, customers can find whatever they need, in any color and any size, by simply picking up their phones. They expect the shipment of their purchases to be just as quick as their shopping experience and grow impatient when that's not the case.
For most businesses, from start-ups to the most well-established corporations, their choice of outsourcing fulfillment services is a secondary concern to making sure that products are flying off the shelves and into shopping carts—both literal and digital.
And once you hit the point where you’re overwhelmed with trying to fulfill your orders, you have a limited number of options:
It's the nature of skilled supply chain professionals to feel a need to have contingency plans for their contingency plans. Designing and implementing a "tight ship" is more than a matter of pre-planning, however: Eventually, something unexpected will happen and even the best supply chain risk mitigation framework will bend in the wake of questions and uncertainty.
In short, good mitigation practice isn't necessarily about building a ship that's entirely waterproof, it's about knowing what to do and how quickly to do it when it springs a leak. Here's a few of the ways you can add more efficiency into your backup plans: