For retailers and ecommerce companies, peak season can represent 60% or more of the annual sales and an even higher percent of the profit. If you’re a manufacturer or distributor, your business may be dependent on a good holiday season, too.
By now, your peak holiday season planning for this year should be well underway. If you’re behind schedule, there’s still time to implement improvements. But, you need to be prudent and not over-commit. Even if you did not do a formal post season analysis, here are some topics to help get you thinking about being more prepared.
Plan ahead with these 14 critical considerations for improving ecommerce peak season operations and fulfillment this year:
Labor, recruitment, and training
We have major concerns about the quality and availability of hourly labor for upcoming peak season hiring. Based on last year’s peak season review, consider the following questions to help with peak season labor:
- What can you do differently in terms of advertising, recruiting, and training?
- How can labor be used more efficiently?
- Where were there too many people or not enough people based on workload?
- How could scheduling replenishment in off hours free up congestion?
- Could a partial or a full second shift increase productivity?
- Can temporary agency labor alleviate problems?
- What improvements in training and procedures still need to be completed?
Competitors set the paceWhat new shipping and fulfillment services are you completing to keep competitive? The Amazon monster gets stronger and stronger - the company is now ready to make one-day shipping the default for its Prime members. CNBC reports,
“Amazon is already capable of offering same-day and next-day delivery to 72% of the total U.S. population, including almost all of the households (95% or more) in 16 of the wealthiest and most populated states and Washington, D.C.”
Create a demand plan
By now, merchandise and marketing planning should be completed for peak season. Your marketing department can likely give fulfillment the topline order plan by week and day. All of your detail planning should cross-foot to this plan so that marketing and fulfillment are aligned. The number of returns can also be estimated as a percent of order demand by week.
Simplify workflow and processes
Temps and part-time workers may not have ever worked in your type of facility. Based on your post-season analysis, consider the following questions to help keep it simple:
- How can you process inbound receipts, customer orders, and returns more efficiently?
- Can the process be broken into multiple steps to make tasks easier and employees more productive?
- Can your more skilled employees handle the complex tasks?
- What can you do to simplify the process for high return ecommerce products, such as apparel, shoes, and electronics? Plan for high returns coming in a few weeks after shipment throughout the peak season.
Product storage and MHE
There is limited time left to make changes to racking and material handling equipment, as lead time on racking is 8 to 10 weeks. You might get faster delivery in a shorter time frame for some rack components by paying a premium. Get approval, get it ordered, and on someone’s installation schedule pronto.
Third-Party Logistics (3PL) as an alternative
Time may be running out to get a commitment to implement a 3PL in time for peak holiday season. One of our clients that started the evaluation process in January just signed with a very large 3PL. As a wholesaler, they must start shipping in August, which will be tight.
Disaster and inclement weather plan
Updating the employee telephone tree and employee transportation plan is absolutely essential in case of disaster or inclement weather. Do you have a plan in place in case inclement weather hits during peak season? Many companies offer employees rides to work during the worst weather to keep production up.
Test system changesSet a drop-dead date beyond which new system changes will not be implemented. Lobby for systems testing to be completed a month in advance of when your peak season starts. That will give a little extra time, if needed.
Help improve outbound shipping efficiency by considering the following:
- Are there things you need to do differently with carriers, such as dropping a trailer and loading trucks?
- Can you extend pickup cutoff times?
- In conventional facilities with minimal automation, can you use expandable conveyors to load trucks?
- What bottlenecks can be eliminated?
Packing materials and other supplies
Maintain efficient packing supplies by considering the following:
- Can vendors manage the supply inventory to benefit your operation?
- Can they store it offsite and reliably make resupply shipments to free up space?
A key failure is not having merchandise available for fall/holiday promotions once the selling season starts. If there is a historical problem of back orders and out-of-stocks, what can senior merchandise management do differently to improve this situation?
Re-emphasize this issue with all vendors, detailing your objective of improving customer service. Can they follow up well in advance to be sure delivery dates will be met, including drop ship vendors?
Are all of your processes cross-channel? Two culprits are often gift cards and returns. Are there restrictions or policies in these procedures which don’t provide a good customer experience? You still have time to eliminate these problems.
Develop a plan
Time is short. Create a plan by considering the following:
- Detail the tasks.
- Get senior management and cross-departmental buy-in.
- Assign responsibilities and establish start and end dates.
- Issue a status report weekly to all stakeholders.
Call a consultant
Consider using a consultant to validate your plans, add senior experience, and get tasks done that are behind schedule.
There is always a lot at risk with peak season. Not being ready can be career shortening. Wishing you the best in delivering high service levels to customers within your budget!