It’s a rite of passage for the most serious of shoppers. Black Friday. It conjures up images of long lines of intrepid bargain-hunters camped out overnight. Stampedes when the doors open. And frenzied crowds ready to drop-kick their way to door-busting prices on the year’s hottest products.
Aside from the sheer entertainment (or blood sport) value, Black Friday marks more than the start of the holiday season when retailers make most of their annual profits. It’s also one of the biggest challenges most retail supply chains face all year. Certainly, there are other key seasonal surges. Easter, Halloween and the back-to-school rush create significant challenges for supply chain managers too. But, whether it’s Black Friday or back-to-school, the secret to seasonal supply chain success is preparation.
Is your supply chain ready for the biggest shopping day of the year? The key to ramping up is being ready. You know it’s coming, so managing seasonality should be a strategic component of your SO&P planning throughout the year – beginning on New Year’s Day. Want to sidestep out-of-stock situations and empty store shelves and make the most of the post-Thanksgiving madness? Consider these six secrets to seasonal supply chain success.
1. Line up a dream team: Field a seasonal support team focused on planning for seasonal demand and capacity. Solicit input from several functional groups across your enterprise.
Takeaway: By choosing the right people to lead the team and support these initiatives, you’ll drive accountability and set the right expectations.
2. Skip the distribution center: Like many retailers, you probably source many of your products from overseas. It goes without saying that offshoring lengthens the supply chain and lead times. This is always challenging, but more so during seasonal demand periods when response time and product availability can make or break your bottom line.
Takeaway: To offset long lead times, kit or pre-load seasonal pushes at the point of origin for direct-to-store distribution. By circumventing traditional distribution centers, products are on shelves faster and there are fewer disruptions to distribution center operations.
3. Fill up your seasonal labor pool: Labor requirements at distribution centers can fluctuate wildly during peak seasons. In many cases, this means doubling your work force. As an operations leader, how do you make sure you have qualified personnel on board throughout the year – without running up labor costs during non-peak seasons?
Takeaway: Have a robust labor management program that alerts you to productivity trends for seasonal hires and lets you project labor requirements for peak periods. Maintain a stable of temporary staffing agencies you can draw on when demand spikes. Let them know early on when you expect demand to spike so you can get the resources you need when you need them.
4. Cross-train employees: When you cross-train people with multiple skill sets, you can move them around your operation based on seasonal shifts. Make sure you design job functions that support different skills sets.
Takeaway: Bring in less-trained temporary workers for less complex job functions during seasonal upticks and let cross-trained permanent employees perform job functions that call for more skills and experience.
5. Develop a seasonal slotting plan: Want to keep productivity high? Make sure you have the right design for your distribution facility. Locate faster-moving products closer to operating areas to minimize travel distance. For products with a different order velocity (depending on the season), develop a slotting plan that helps your workforce ramp up fulfillment for seasonal products.
Takeaway: If you have several seasonal events, set aside a seasonal product area you can re-slot for each season to minimize movement of non-seasonal products throughout the year.
6. Set up distribution centers for cross docking: Spikes in order quantities during seasonal periods result in more full-pallet or full-case replenishment orders. However, many operations continue to receive, put away and pick to fulfill these orders the same way they do during non-peak periods. This can result in inefficiencies, since products are stored and then picked in the exact configuration to fulfill an order soon after they’re put away.
Takeaway: Setting up distribution centers for cross docking (manually or systematically through a WMS or through a reporting process that matches inbound product receipts to outbound orders) can help you minimize time spent moving products and fill customer orders faster.
With a little smart advance planning, you can get products to market faster, keep costs under control and deliver better customer service — for a Black Friday that gives you something to be thankful for.
Mario E. Rivera is a Director of Supply Chain Excellence at Ryder. He is a logistics and engineering professional with 10+ years of experience in supply chain engineering, optimization and solutions design and development, operations and business development. Throughout his career Mr. Rivera has been involved in designing, implementing, and supporting numerous supply chain solutions for Ryder’s customers across a variety of industry segments.
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