When should the supply chain begin preparing for peak season? When should fulfillment companies as well as manufacturers and eCommerce sellers, logistics providers, ocean transport, and carriers begin? We will attempt to put forth best practices, but first, we’ll need to answer the question, “What is considered peak season?”
When we ask Google, the answer is: “When is Retail Peak Season? Retail peak season doesn’t have strictly defined dates — every supply chain is different. That said, typically the initial retail peak season surge occurs begins in October. Retail peak season ends roughly three months later at the end of December.”
That’s the beginning of an answer. Another question could be, when do we see the most shopping and buying? In the US several times come immediately to mind: Thanksgiving, Black Friday, Cyber Monday, and Christmas. We also should include Valentine’s Day and Amazon Prime Day, and possibly Mother’s Day, Father’s Day, and Halloween. Some businesses may sell Valentine’s or Halloween products so their holiday season will differ from others.
What does the peak season focus on? The answer to this question depends upon where in the supply chain the business operates. In this writing, we’ll cover what the eCommerce retailer would focus on, and how the fulfillment company does peak season planning.
According to Kardinal.ai, some online retailers generate 50% of their sales during a peak season. Of course, with this eCommerce company, there has to be preparation for this peak, which could be related to a holiday or an organized promotion.
The online retailer will use past experience or previous peak seasons to predict the start and end of the season. If the peak begins with Thanksgiving, the retailer will begin offering deals and promotions before Black Friday, Super Saturday, and the Cyber Monday online shopping event. The business will need to plan for the beginning and the end of the season, with a focus on getting the deliveries to the customer on time. The company may have to hire temporary labor or purchase or expand equipment. Predicting and timing these things wrong can be costly, so the first thing the eCommerce business must do is forecast this year’s peak season and get the timing right.
More forecasting must be done concerning volumes. There may be an influx of orders across all channels, or spikes of orders, or there may be an extended unusually heavy volume making peak prediction accuracy vital. Is there adequate product supply – not too much, not too little. Will there be an adequate labor supply? Labor supply changes from year to year so the company must factor in the current circumstances. The shipping and carrier situation can change too, so the business not only prepares itself, it must analyze other factors it cannot control but must adapt to.
The online seller may not manufacture the products it sells and therefore it will need to purchase from the manufacturer enough of the right products, hire enough staff to fulfill the orders, do its marketing and promotion on time, and get the timing right takes some predictive skills.
Nowadays the companies doing the most accurate forecasting are using technology to look at past experiences and previous peak seasons and depend upon machine learning to advise them: advanced algorithms will be used to look at trends in the data. The company will use this information to make decisions on timing, inventory, and labor.
Some training of new and/or temporary labor has become easier and quicker due to robotics, thus reducing the cost of hiring and spending several weeks of training. Accurate forecasting concerning labor does depend on the amount of automation. Some demand patterns remain consistent over the years and some will change due to advancements that have been made in automation.
Online sellers who outsource fulfillment to a fulfillment company will also need to forecast. What will the peak season require of them? They will need to get the right amount of products into the inventory at the fulfillment company, they will need to anticipate and choose the products that buyers are going to want, and they may need to add to their customer service team.
All online sellers will want to optimize their website’s checkout, promote and market their products and time their marketing appropriately, choose the right fulfillment partner, and get their inventory and technology in place. They will also need to monitor the fulfillment, shipping, and delivery while peak season is in process, so this means the technology the eCommerce seller has integrated with the fulfillment company needs to be top-notch before peak season begins.
Reviewing what businesses should do first and determining what is most important, they will look at the historical data. When do the high-volume sales begin and when do they end? Peak seasons begin and end differently depending on the products being sold but every company will have experience and data regarding their peak orders. If there is a new product in the company’s line that they’ve been marketing for the first time in the season, predicting peak sales will be more challenging.
The business needs to identify which products will be in high demand. What are the trends, what are people marketing, what is the company marketing, and what is predicted to sell. The business will stock up on products that are in high demand or predicted to be in high demand. Having adequate stock in the warehouse, or at the fulfillment provider’s warehouse is essential.
Of course, the business needs to prepare the employees for peak season and add temporary staff to handle the increased workload. If the business operates its own warehouse, this would include the warehouse staff. If the company outsources its warehousing and fulfillment, it will be customer service staffing and other positions within the business where an increase in staff may be needed. Customer service is vital during peak season as satisfying the customer is always the goal.
Peak season offers the opportunity to attract new customers that will remain customers beyond the peak season. With peak season comes the opportunity to increase sales, gain new customers and increase revenue, so in the upcoming holiday season, satisfied customers are a must.
An article at Alibaba.com offers tips for peak season for businesses. Number one is to plan ahead, primarily reviewing what to expect based on past experience. Next, we will develop a marketing campaign strategy.
The advice is to look at which products might trend in the current season and develop a marketing strategy for those products, identify the target audience, and decide where to invest the marketing capital, i.e. in videos, website upgrades, on social media, paid ads, develop a referral system or other strategies that work as a method to make contact with customers.
Before peak season a company’s website should be at peak performance concerning the load time, the payment systems, and so forth. Prepare the website for increased traffic. The fourth recommendation goes back to marketing and giving attention to the best-performing channels. If emailing contacts has worked well in the past, they will use it before peak season letting customers know what discounts and specials are being offered.
Whether the business has their own warehouse and fulfillment process or it outsources to a fulfillment company, they need its inventory in place before the beginning of the peak holiday season. How much and what inventory is the question. That brings us back to forecasting and predicting.
If an online business partners with a fulfillment company the partnership and working relationship must be in place and functioning well before peak season. The holiday season is not the time to onboard and start working with a fulfillment company, and businesses do recognize this. Fulfillment partnerships are established before peak season, and onboarding will include preparing for peak season.
We have pointed toward hiring staff, which is the next on the list. No matter the business, whether a big box retailer or a boutique, or an eCommerce-only business, staff will be needed, and previous peak seasons will be the best predictor of who is needed, where they will be needed, and how much training time is involved. Whether it is the customer service team or the warehouse personnel or both, there must be time to train, and this would include safety training for warehouse personnel.
Putting the customers first comes next, with encouragement to prepare the customer service team, and determine what perks should be offered to past customers. Customer service is vital when it comes to returns as well, so hiring the team and training the team is required preparation. There will be returns, and it’s vital to make it a smooth process, so the business should review its return policy before peak season comes. Of course, all employees should be aware of the gear-up to peak season and how the business is preparing for it. Informing and preparing all employees and reviewing policies is vital in putting the customers first.
The next recommendation has to do with servicing and repairing equipment. Some eCommerce businesses will not have to worry about maintaining warehousing equipment. If they outsource fulfillment there will be little equipment to maintain other than technological, which they definitely need to review and maintain before peak season.
Early in this writing, we talked about automation, and how that can make staffing less of an expenditure. Automation would be in place and in use well before peak season, so the impact would be less hiring and less training. The final recommendation has to do with the budget. The business is encouraged to get the estimated costs in place well before peak season so there is no sudden overspending. This would include marketing, inventory, and labor.
Now that we have covered how a business engaged in eCommerce should prepare for peak season, it’s time to look at a fulfillment company and see what a business that is heavily impacted by all peak seasons will do to prepare. Preparing fulfillment operations involves hiring and training staff, streamlining operations, doing detailed stock counts, maintaining equipment, forecasting, examining data, communicating, and much more.
When peak fulfillment season begins, there will not be time to do equipment repairs or machinery maintenance. This must be done well before the beginning of peak. A fulfillment company in the business for several years will have a historical record of peaks to look at to determine when this should be done. Equipment maintenance and building maintenance will be high on the list of preparations for the peak holiday season.
We spoke about automation concerning businesses preparing for peak and fulfillment companies are well aware of the savings that can be made with automation. The automation of certain tasks will be in place, in use, and maintained before peak season. The fulfillment company will schedule and complete maintenance on all moving systems – sorters, conveyors, labeling systems, and so forth. Spare parts will be stocked up as the equipment will be heavily used and if repairs are needed during peak, the company must be ready.
Fulfillment companies depend very heavily on technology, with the warehouse management system, inventory management system, integrations with clients, electronic data interchange, and more. Fulfillment companies are very reliant on their technology team. Any upgrades and all maintenance of these systems must be done before peak shipping season. And we should mention, the best fulfillment companies will have their in-house technology team.
Another area that is important to look at before peak season is the location of inventory in the warehouse. Slotting is the process of the warehouse management system organizing inventory, and in a fulfillment company, this is an immense task. Past data on peak seasons will inform the present task, but clients may have changed, or client needs may have changed so preparation for slotting must take place before peak season. The experience of the fulfillment professionals is very helpful in making these decisions along with the data.
What does peak season mean in shipping? Shipping is another area where pre-planning must be done. What does the supply chain look like? Where are the shortages? Are there any port problems, any carrier problems? The shipping department can prepare only so much, as there are circumstances outside of the fulfillment company’s control. Peak season is peak shipping season and a great deal of customer satisfaction, and client satisfaction will depend upon shipping. The fulfillment company must be well informed about supply chain issues and base their preparation and decisions upon their research and relationships with the carriers.
Fulfillment companies do hire temporary labor and they have past data to help them know how much and when. This is another area where circumstances might dictate the ease or difficulty of the process. Is there a labor shortage or will temporary labor be available? While there are some jobs handled by technology and other jobs easier to train for because of technology, labor is still one of the major peak season concerns, and job training and safety training is an absolute necessity. The staffing must be at its best to handle peak volume.
In addition to the preparations mentioned, if there are any changes taking place, the fulfillment company will get the changes in place and settled before peak season. And finally, the fulfillment company should set up processes to collect the data to help in future planning. Keeping data that answers the question… what are your throughputs; what and how much material or how many items have passed through your system, and how is your operation performing according to key metrics during the holiday peak season. Fulfillment companies do collect and analyze data from year to year and they use this data to aid in forecasting.
AMS Fulfillment has more than 20 years of experience in handling peak seasons under all kinds of conditions. Planning for peak season at AMS, a company with years of experience, includes all that we have mentioned…
At AMS, peak seasons in the past few years have been greatly affected by the pandemic. Preparing for peak season has been exceptionally challenging for AMS and its clients. We did make it through these challenges and performed exceptionally well for its clients, many of whom enjoyed a successful peak season. Online orders increased, clients went through changes, and the company was very much put to the test. Fortunately, we came through the test stronger, better, and smarter. Today commerce in general has changed and new footing has been gained upon which to analyze and plan.
Most likely, this year’s peak season will begin in October and it will last until January. Since the pandemic occurred, this season begins a bit earlier and lasts a bit longer. Sales continue to rise but the supply chain has also become more complex. A list of general recommendations includes:
A B Corporation fulfillment company is a rarity. AMS Fulfillment has been a certified B Corporation since 2017, committed to our five stakeholders: our employees, the communities in which we exist, the natural environment we share, our valued clients, and ourselves. Every decision we make has our five stakeholders in mind as we seek to B the Change we wish to see in the world.
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