This blog was written by Dave Tu, President of DCL Logistics.
Did you spend last year’s holiday season struggling with inaccurate orders, delayed shipments and a customer service mess? If so, improving fulfillment operations is likely to be at the top of your priority list this year.
According to the National Retail Federation, your customers are already researching what they are going to purchase for their holiday gift giving. The clock is ticking to make sure you have a proper plan in place to scale for a successful season. It can be challenging to handle a tremendous surge in volume while delivering the right products on time and at a reasonable cost to ensure customer satisfaction. Take time now to identify objectives and the steps needed to improve holiday fulfillment for the coming year.
The below tactics are very simple, but they are helpful reminders so you can plan for successful holiday fulfillment performance:
Build a Projection Model
Hope is not a strategy. Build a forecast model so you understand what your projections will be for Q4. Use historical data trends as a baseline or, if you have little or no history, seek advice from a friend in the same industry. Try to get as detailed as possible, breaking down your volume by sales channel (B2B, ecommerce B2C) at both a unit and order level. By breaking it down by sales channel, you will be better equipped to plan — since the operational requirements for each channel can vary significantly.
Know what marketing campaigns are scheduled to launch, and keep a keen eye on any events that may drive customer demand, such as free or discounted shipping or products. The span from Black Friday to Cyber Monday — all the way until Christmas Eve — is the heaviest shipping period of the year, so you will want to model the volume day-by-day during this critical period.
Be sure to research your delivery options and have them in place well before the season arrives. Understanding these details is essential in order to set and meet customer expectations. Are you planning to squeeze in orders, waiting until the very last moments before the holiday, by offering expedited shipping? Are you going to offer more aggressive shipping and delivery options such as in-store pickup, same-day delivery, or free returns? Planning for these options must be in place well before they arrive in order to flawlessly execute and communicate to your customers.
Transit time is often critical for holiday shipments. For companies using multiple distribution centers, analyzing historical shipment patterns and real-time delivery data, to ensure that inventory is correctly balanced, is a great exercise that can help minimize shipping costs,delivery times, and unhappy customers.
It is critical to communicate with your carriers, in advance of the season, to ensure that they have the capacity in their local and national networks. Do they have plans to send additional trucks to pick up your increased volume? Understand if there are going to be any peak surcharges or additional carrier pickup fees. Translating these changes, and communicating them to your customers, is key both to optimizing orders and keeping customer service issues low.
Understanding your carriers’ cut off times is extremely important. Did you know that Christmas is going to be on Monday this year? Will you be getting carrier pickups on the days before Christmas with an eye toward delivery on Friday or Saturday?
Do you have more than one carrier to rely on? This is where having all your eggs in one basket can hurt you if your carrier drops the ball. The options for bringing on another carrier, or increasing orders to your secondary carrier, can bring numerous obstacles and risks, especially since they will be in peak season, as well. As a result, they may give priority to firms that use them as their primary carrier.
Take stock of facility space, equipment and shipping materials. Confirm that there is enough floor space available to handle increased holiday volume and that it is configured for optimal order processing. Verify that there is enough equipment on hand to accommodate the additional volume, and plan to source extra material handling equipment and shipping stations, if necessary. Shipping materials such as labels, boxes and dunnage are typically an afterthought but one needs to stock and build in advance. Identifying and addressing these needs ahead of time can prevent major headaches at the height of the holiday season.
Third-party partners are optimized to accommodate the ebb and flow of peak holiday season volume, helping to meet customers’ peak requirements without adding overhead costs.
Staffing can be one of the biggest challenges during the peak holiday season. Arrange for extra support well in advance and provide sufficient training and cross training, so associates in all areas can hit the ground running and offer excellent service. Have key people on call throughout the season and seek the support of the many temporary agencies in the market. Start the tough conversations now if your personnel will be required to work on the Friday after Thanksgiving and on the weekends during the December push.
Systems-based planning plays a critical role in successful holiday fulfillment. Check that your software is capable of handling the increased volume. Data-tracking metrics are also essential for identifying issues and addressing them quickly. If a third-party partner is used, ensure that their systems are effectively and seamlessly integrated.
Information is key. Sophisticated systems ensure real-time visibility, accurate reporting and the ability to optimize inventory across multiple fulfillment sources.
Develop a plan now to give yourself the best chance to execute a successful peak holiday season. If you decide to engage with a third party fulfillment center, you’ll be better off having those conversations now.