For Canadian retailers, projecting resources needed to fulfill sales demands throughout most of the year is typically straight forward. However, when it comes to projecting and preparing for seasonal shopping peaks it can be the most stressful time of the year. During Black Friday, Cyber Monday, Christmas & New Year periods retailers see huge increases with both in-store and online orders, which for many retailers causes their supply chain to be pushed to the breaking point.
There are many moving parts that need to be considered in order to see successful seasonal peak performance. This includes:
- ensuring that e-commerce websites don’t crash due to volume spikes,
- developing a flexible on-demand labour force,
- fulfilling and shipping high volume of orders on time, every time
- …and more.
Adding even more pressure is the fact that most Canadian retailers generate a significant portion of their overall yearly revenue during Black Friday, Cyber Monday, Christmas & New Year shopping events, so there isn’t much margin for error when it comes to getting things right.
Other challenges include having the ability to move products on time, coast to coast. This requires retailers to either have their own national capabilities, or find a partner who does. 3PL partners also need to be able to fulfill orders, store large quantities of products across Canada and have flexible space for seasonal peaks. Partnering with SCI, with distribution centres in the East and West (1 in Ontario and 1 in British Columbia), retailers would be able to reach 55% of Canada within 2 days. However what’s important to note is that there aren’t many supply chain service providers that have resources to support such infrastructure. Therefore, partnering with a 3PL that has this national supply chain infrastructure needs to be a primary requirement to ensure successful holiday peaks.
When trying to determine if your supply chain is able to handle the volume increases, one of the best ways to test capacity is through stress testing. Simulate worst case scenarios by holding all orders for a period of time, and then fulfill these orders within a day to see how much of a volume increase the facility can handle. Part of this should also test the facility performance by seeing the results of processing these increased order volumes. This will ensure that when the time comes, you are confident that all orders will be able to be fulfilled in a real-world scenario. A good rule of thumb is to start preparing as early as spring to deal with Black Friday, Cyber Monday, Christmas & New Year events that create these types of increases in order volume. Early bird gets the worm.
For measuring success it is important that the right KPIs (key performance indicators), are used to monitor, assess and report on progress, and that they are established well before the actual peak period. Successfully handling peak season volumes will revolve around planning, clear communications and collaboration from all sides. This is much easier for everyone when the goal posts are clearly defined right from the beginning. For many companies KPIs include dock to stock, order accuracy, on-time fill rates, fill rates, inventory accuracy and eliminating “floor denial” when the inventory depletes.
Furthermore, ensuring adequate employee training around your KPI’s will lead to better understanding of the goals needed to increase productivity, meeting your company’s quality standards, and will eliminate time wasting activities.
Here are some examples of the tactics that SCI employs to manage order volume through seasonal peaks:
- Perpetual Slotting: Our operations team will work to slot product based on velocity during on and off peak times to ensure we drive down the number of picks from the high bays, move the fastest sellers closer to the dock, and minimize wasted cube in our bins.
- Cartonization: With the proper cube information in our system, SCI will wave orders based on box sizes to maximize the space utilization on the pick carts and minimize the number of box sizes that an order selector has to manage per wave.
- Waving Techniques: We have built a series of waving strategies in our retail business that allow us to wave orders based on a variety of criteria. For example, single line, single piece orders will be waved to a certain order picker to maximize efficiency.
- Sortation by Zone: With proper slotting and order profiling techniques, we will wave orders out by zone to minimize the walking distance of each order picker.
- Workload Rebalancing: We will take certain elements and break down its sub-tasks to simplify the process and, therefore, allow for faster learning curve and more throughput.
It has been estimated that Canadian retailers earn 40% of their annual business during peak holiday periods. Missing out on this revenue due to supply chain deficiencies can lead to large setbacks for companies of any size. This is why it’s so important that you choose the right supply chain partner – it can make the difference between having a successful, lucrative peak period, to your peak period causing larger problems, stretching beyond the supply chain itself.
Contact SCI to learn how we can help with pushing the limits of your supply chain through this year’s seasonal peak requirements. We have retail 3PL experts here to answer your questions, and provide you with a no-obligation estimate.