Posted by Senior Management on 10.31.16
Retailers and logistics providers are scrambling to prepare for the upcoming holiday season…and for good reason. According to the National Retail Federation, holiday sales are expected to increase 3.6 percent to $655.8 billion, and online sales are forecast to increase between 7 and 10 percent over last year to as much as $117 billion. The sudden uplift in consumer demand means many businesses will double, triple, or even quadruple their fulfillment volumes almost overnight.
Add to that pressure a consumer expectation for rapid fulfillment regardless of when they place an order. The vast majority (96%) of consumers same-day or next-day delivery to be “fast shipping,” and 9 out of 10 online shoppers say free shipping is their highest motivator.
Each holiday season a number of retailers, both large and small, disappoint their customers with stock-outs, back orders and delivery delays. In the aftermath of a substandard peak performance, many companies call Sedlak to evaluate what went wrong with their distribution operations and develop improvement strategies.
Here’s the problem with waiting until after the madness is over to address any peak season breakdowns…
Distribution and logistics solutions development is a data-driven process that relies on operational statistics, observations of live operations, and interviews with key personnel to understand the requirements and constraints. When our team visits a site during calmer, non-peak times, our observations are based on lower business volumes, and our interviews are limited to people’s memories of peak. A firsthand view of your peak season operations can provide much greater insight into your true peak requirements and the right path forward to greater efficiencies and satisfied customers for high-volume periods.
So, in an effort to be better equipped to optimize next year, here are a few tips and tricks to capture the real story of your peak season before it fades.
Use an Excel tool - Capture “plan vs. actual” on a daily basis during peak. Include:
What is happening at the docks? Document the timing of shipping cut-offs and dock door activity, as well as the impact on operation. What measures had to be taken to meet the cut-offs? Was congestion created as a result? Were there quantifiable missed opportunities? How many rush orders had to be worked into the queue? For every rush order, there is a missed opportunity to batch the work.
Take pictures – Take photos of the entire operation, particularly anything that is overflowing or underutilized (staging areas, the backlog behind the giftwrap stations, the stacks of cases staged to replenish a pick location that is not properly sized for actual demand, etc.). Phones make this task easy. During site tours, we take many photos and reference them often to review details that seemed inconsequential at the time of the tour.
Consider an audit now – Consider a peak operations audit in the midst of seasonal madness. If your operation is near capacity, that call represents a small investment in your business to make future holidays “the most wonderful time of the year.”
Sedlak has been helping retailers and logistics providers optimize operations, gain efficiencies, and improve service levels since 1958. To learn more, fill out the contact us form below.