How companies can prepare for peak season with optimised logistics
Amid another difficult year for the economy, the ‘golden quarter’ has arrived – and with sales volumes now expected to peak, making the most of that is going to make or break many firms. Experts from SCCG explain what organisations can do to make sure their supply chains are prepared for the jump in demand.
The Golden Quarter for sales is here. Sales volumes are expected to increase shortly, driven by events such as Black Friday, Cyber Monday, and the Christmas holidays. This period brings significant challenges: strained warehouse operations, inventory bottlenecks, carrier availability and pressure on staffing. Customers are becoming increasingly demanding: communication and support services must be seamless.
The Supply Chain Consulting Group helps online retailers and distributors by optimising inventory and demand forecasting. Building flexibility to manage peak season surges and potential disruptions leads to cost reduction, improved customer satisfaction with fewer stockouts. A more resilient operation can better manage fluctuating demand.
SCCG believes there are a number of key challenges to address to make the most of this. These include pressure on storage space, the need for seasonal staff and suppliers that fail to deliver on time. Here are six ways a firm can make sure it is ready to face this critical sales period.
Forecasting demand for the peak season
Overestimating demand leads to excess inventory and capital being tied up, while underestimating it causes stockouts, lost sales, and dissatisfied customers. Inaccurate demand forecasting can be costly. Although peak-season sales are volatile, forecasting can be improved in two ways:
Historical sales, real-time point-of-sale (POS) data and AI-driven predictive analytics combine to provide valuable insights. Across the supply chain, decision-making is
becoming increasingly data-driven. A cloud-based software solution is becoming the standard for efficient demand planning and forecasting. Data analytics builds resilience by providing more accurate sales projections in an erratic marketplace.
A successful Q4 will depend on the collaboration of all stakeholders to respond to changes in demand. That includes suppliers, procurement, production, finance, and logistics personnel. Modern technology and demand planning tools facilitate this online using a shared dashboard. Suppliers can use your demand forecast to plan, leading to fewer supply disruptions.
Lack of warehouse capacity and poor picking efficiency
Space constraints are important. Extra inventory needs more space. Warehouse design and layout directly affect your ability to cater for the increased volumes. Any improvement will streamline workflows. Capacity can be increased by creating a temporary mezzanine or using pop-up storage, slotting and cross-docking. Remove obsolete and slow-moving stock to free up usable space.
Focus on the accessibility of high-volume SKUs for faster order fulfilment. Clear labelling of aisles and storage areas speeds up all activities. Automated technology tools such as voice-activated hand-held devices, barcode scanners, drones and other robotic devices speed up the process.
A warehouse management system (WMS) will record and track item availability across all locations, produce status reports and manage the replenishment process. Picking, packing and dispatching orders can be controlled within a WMS.
Seasonal labour and cost pressures
Flexibility is needed to address the demands on staffing requirements during the peak sales season. Permanent staff can be trained to multi-skill or to change roles as sales ramp up. Overtime and extra shifts need to be budgeted for and actively managed. Mobile technology tools and wearables can reduce the manual labour required, boosting productivity.
For seasonal and casual workers, early engagement with employment agencies and other sources is recommended. To improve staff retention, offer incentives and bonuses. Workforce planning software with data analytics manages costs for both employees and casuals.
Last-mile and traffic congestion
The last mile is often considered the most challenging and most expensive part of the entire supply chain, being a significant portion of the total delivery cost. In Q4, there are always carrier capacity shortages, peak season surcharges, difficulty securing drivers and urban traffic congestion. This is happening when customers are demanding faster and accurate deliveries. These challenges can be mitigated by:
- reducing travel miles using local micro-fulfilment hubs
- pre-booking carrier capacity early
- adopting route optimisation software
- encouraging click-and-collect services using lockers
- scheduling off-peak and flexible delivery options
Selecting and negotiating with alternative and reliable 3PL and courier delivery partners will be the differentiator. Data sharing with delivery partners enhances coordination and minimises failed or delayed deliveries.
Real-time visibility and performance reporting
Upholding service quality during fast-moving peak-season operations is the goal. Early indication of bottlenecks and labour issues is vital. Automated warehouse software solutions ensure:
- Inventory data is live, in real-time
- Automated replenishment of items
- More efficient use of warehouse space
- Faster fulfilment, fewer errors
Integrating management systems such as TMS, WMS, IMS and IoT tracking provides end-to-end visibility across warehousing, inventory and fulfilment. Real-time dashboards monitor KPIs such as order cycle time, order accuracy, and delivery performance against targets.
Balancing speed and cost with sustainability
Harness available technology. A data-driven logistics strategy helps balance cost, speed and sustainability. Route optimisation software reduces fuel use and emissions by consolidating deliveries and prioritising eco-efficient routes.
And make sure to control operating costs. Optimise energy use, choose sustainable packaging and set realistic delivery promises. Align service levels with product value to meet customer expectations and maintain profitability.
