1 Plan Early and Often As the holiday season becomes longer and more vulnerable to disruption, starting holiday-focused supply chain planning and preparation earlier “ is a new best practice,” says R.J. Romano, managing director, management consulting, supply chain, with BDO. For instance, PyroFarms, a company that grows and sells PyroDinos (bioluminescent phytoplankton that can produce light at night and fresh oxygen during the day) has become more strategic in planning for its holiday demand spikes. Prior to 2023, the company began its holiday planning process in August or September. But in 2023, it began forecasting holiday levels in June, combining 2022 trends and current growth. “This modeling allows us to order supplies sufficient for a strong holiday season while not extending our inventory beyond what is required,” explains Dean Sauer, PyroFarms’ founder and CEO. The early start also allows for more coordination with suppliers. Through a different lens, a longer peak season can make operations more manageable. Buyers can try to space out their purchasing, so, for instance, they receive some inventory in early October and the rest in mid-November. If demand spikes before the later shipments arrive, the company still might not be able to meet it. “Timing is a critical piece,” Romano says. Scenario planning exercises are another important tool for early planning, where various stakeholders bring together data from across the enterprise to model “what-if” scenarios and identify gaps and risks. Modeling the impact of an unexpected demand spike, for example, enables leaders to study the results and determine where to add supply chain redundancy to avoid being caught short.
continual, rolling 12- or 13-week forecasts throughout the year. This allows time to assemble resources—whether people or equipment—to assist in the flow of goods. Given the Red Sea situation, the drought at the Panama Canal, and potential labor action at U.S. East Coast ports, importers and exporters need to prioritize contingency planning, adds Bourke. This includes considering alternate modes and routings, he adds, noting that companies are returning to sea/air and road/air solutions to help keep products moving. 2 Embrace Automation Boosting efficiency through automation is important any time of the year. During the crush of the holiday season, it can become critical. Take the example of Burlap & Barrel, a provider of single-origin spices: The company developed proprietary software that its two third-party logistics (3PL) providers can both access. The solution enables Burlap & Barrel to easily shift orders between the 3PL facilities and keep orders shipping out in time for the holidays, explains Ori Zohar, the company’s co-founder and co-CEO. To accomplish this, Burlap & Barrel modeled its daily fulfillment needs based on its sales forecast and then matched it against each 3PL’s daily capacity. This data allows it to flag the days or weeks when one facility is likely to become backed up. When pending orders at a facility start to exceed daily capacity, the company shifts more orders through the other one. 3 Leverage Visibility Visibility across an organization’s supply chain is critical for a smooth holiday season. “Visibility is table stakes,” says Jonkman. Companies must go further yet: The key is using the information that’s now visible to take actions that can improve operations. One example is using the data to reroute goods that are delayed due to congestion or a snowstorm. “The worst thing is to have great sales and delivery, but then have the product stuck somewhere in transit,” she says.
Combining visibility and collaboration also pays off. For instance, tools that allow operations and customer service teams at both shippers and logistics providers to collaborate can eliminate time-consuming calls and emails. 4 Make Data-Based Decisions Leveraging technology to make data- driven decisions is another tactic to boost performance. For instance, analytics tools can detect unexpected demand shifts earlier so companies can respond quickly, leading to a nimble and resilient supply chain. “Putting the proper data collection and analytics tools in place during the non-peak season is an essential first step in preparing for future busy seasons,” says Romano. In addition, AI and generative AI can help plan for staffing needs and assess what-if situations. 5 Boost Inventory Management The advent of the peak season should be a call to retailers to clear their distribution centers and stores of obsolete and burdensome inventory. “Retailers must perform a delicate balancing act between creating space for seasonal products and streamlining operations for maximum efficiency and effectiveness,” explains Jeff Bornino, president, North America with TMX Transform, a supply chain consultancy. Given the potential for ongoing disruptions, Wicky of MyFBAPrep recommends a sourcing approach that encompasses multiple different suppliers, even ones located in different regions of the same country. He also suggests shifting from a just- in-time inventory approach to holding enough inventory to avoid going out of stock. That’s particularly true for online sellers, who may jeopardize their rankings on different marketplaces if they experience out-of-stocks. Depending on how ongoing geopolitical events evolve, companies also may need to book orders earlier than
Some companies have begun planning for the holiday peak as
early as January, says Steve Sensing, president of supply chain solutions and dedicated transportation with Ryder. Ryder works with customers to prepare
normal to avoid transportation delays in receiving inventory.
32 Inbound Logistics • March 2024
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