Believe it or not, there is still a window of opportunity to make sure you are ready for this Holiday Season. Just think back to last year's peak season for a moment. Can you and your business afford to have Round 2 (and for some of you it may be Round 10 or 12) of the issues that you faced in past peak seasons? You may have completed a brief post Holiday Season review of what worked and what needs to change in your operations. Dust off that document and review with management the outlined issues that occurred last year and the ones that still need to be addressed. This should be done before any other areas are assessed and tackled.
If you are starting from scratch, this post lists several activities, quick assessments, and fixes to choose from to help get your distribution center facility, staff and operations ready for the Holiday Season.
Warehouse Layout and Design
Conduct a warehouse layout review for each department. Check with your inventory department to make certain on the product levels that will be showing up and accumulating in your facility. Only fix the specific issues that you can realistically complete before the ramp up. Make certain that the changes will make a positive difference in the peak season. These improvements should focus on improving facility organization, product workflow, efficiencies, storage capacity and space utilization.
Warehouse Order Projections
Many Holiday-dependant businesses receive as many as 50% of their orders in the 4th quarter of the year, and most being in the last 30 days of the year.
Do you have the latest order flow projections from the Sales and Marketing group?
Have you broken them down to the daily level?
Once you get into the season do you have an automated or quick way to adjust the daily order flow up or down based on response?
Projections drive staffing needs.
- Have you calculated your staffing needs by day to meet your service level goals (orders/boxes per hour per employee, lines picked per hour per picker, etc).
- What is HR’s hiring plan or theme to get you the help you will need?
- Are you offering a “stay on” bonus to the seasonal workers?
- Have you contracted with a staffing agency to provide backfill if you need it?
- What is your staffing strategy if orders significantly vary (+ or -) from plan?
- Do you have inclement weather transportation backup plans in place?
- Have you conducted evacuation drills recently?
- Do you have a written plan to give to all new hires?
- Do you need to conduct one when fully staffed?
All hands on deck - We believe that in a true seasonal business, no one takes vacation during the peak season.
Warehouse Space Requirements
Holiday based businesses often see inventory increases of 40+% and even though inventory turns should be much higher than the rest of the year, product often arrives weeks or months before it will sell.
Was any additional temporary storage required last year (nearby “overflow” warehouse, trailers spotted on the yard or at the docks?) Have you made similar arrangements for this Holiday?
Have you performed pallet consolidation to free up additional rack positions?
Do pallet rack locations vary in size (distance between beams) to best match the height of the arriving pallets? Many warehouses are set up with all beam spacings the same, which results in shorter pallets leaving lots of open space above them.
Are all your primary locations filled to max?
Are there opportunities to add additional pallet racking in the building? Above the dock doors? Above flow rack?
Is the maintenance of all your Material Handling Equipment up to date?
Lift equipment, power conveyor, PLC systems, backup power supply (generator), RF equipment, order printers, company fleet, etc all up to date?
Are your software vendors aware of your seasonal peaks and have 24/7 support in place?
If you are located in the snowbelt have you contracted for snow removal?
Freight and Shipping Options
Have you shared your shipping projections with you key carriers? Do they have enough equipment in place to handle your volumes?
Do you have a backup plan in place in case of labor or strike issues?
We believe that as a matter of policy, companies with holiday peaks should not make any significant changes to their key information systems once the peak season starts. We have seen IT and management try to crush in a new system that has been lagging behind all year in Oct with disastrous outcomes and put the business at risk.
This being said, are there any IT considerations that need to be addressed on an emergency basis to get through the peak? These may be more operational in nature.
Preparation For Next Year
Post Holiday Season analysis for next year starts with being mindful of noting things you’d change for next year. Challenge your supervisors to make these notes as they happen in the heat of the peak season. Simple cell phone videos or pictures say tons about space use.
Bring in an independent consultant at peak to observe for a day or two your most maddening challenges and issues so that the consultant can see it first hand and not during non-peak when volumes are down. Many times consultants can give you recommendations for operational improvements or validate what you’re thinking about changing in the operations. Additionally, it will help you think through necessary changes for next year's peak season that you can begin working on as soon as the peak season has wrapped up.
Again, it is not too late, but you need to be realistic on what you and your team can take on and successfully complete prior to the large volume ramp up in the Holiday Season. It may only be 2 or 3 items, so make certain that they are the issues that really need your time and energy focused on.