Inbound Logistics | January 2022

hether you anticipate a retail demand surge or it happens unexpectedly, you need to be able to manage that sudden order spike in ways that don’t harm customer relationships or your bottom line. Here are nine ways companies across the retail supply chain capture and ll orders when demand surges.

“Retailers are getting smarter, thinking about how they can start to pre-sell and put customers in line to buy products ahead instead of waiting for a Cyber Monday surge,” says Troy Graham, vice president of business development at e-commerce solutions company Descartes Systems Group. This approach also assures customers that they will get the product, he adds. PUT SOME OF THE ONUS ON THE CUSTOMER. Third-party logistics provider Flexe is seeing results with brands that advise customers to “get it while you can.” Flexe clients using this scarcity strategy to manage demand spikes are better able to promise and then meet a customer delivery date. “This strategy allows brands to get items to the customer quickly, but it’s also on the customer to make that happen by heeding the ‘while supplies last’ messaging,” says Megan Evert, senior vice president of operations, Flexe. OUTSOURCE SURGE FULFILLMENT. Flexe offers a launch fulllment service designed to handle surges inherent with product introductions. Typically, the manufacturer ships inventory to Flexe facilities in multiple markets selected for their proximity to

GO DEEP WITH SUPPLIERS. Have “what if” conversations with suppliers. Identify the products that are likely to experience a spike, and pose surge scenarios to suppliers and manufacturers to learn how—or if—they can meet increased demand levels. “Any company that buys anything should have conversations about what happens if demand doubles or halves,” advises Michael Zimmerman, partner and analytics practice leader at consulting rm Kearney. The solution might involve a nancial investment to guarantee capacity or contracting product manufacturing elsewhere so you have options. MAKE DECISIONS AT THE FACTORY. Consider committing to factory capacity before you need it. That’s what Mark Burstein, industry principal at supply chain technology provider Logility recommends. If, for example, the manufacturing timeline for a product

is three to four months, he says, a retailer might not receive a surge order until 150 days later. Booking capacity early moves your surge order ahead of others who haven’t ensured that protection. At the same time, Burstein encourages retailers to forecast demand not just for products, but for raw materials as well, and to position those materials at the factory early. “With the materials in place, you can direct them to both high demand and most protable products,” he says. He also recommends saving time and touches by shipping nished goods directly from the factory, bypassing distribution centers completely. PRE-SELL TO CUSTOMERS. Taking a page from book publishers that have long used pre-orders to gauge demand for a book and determine how many copies to print, retailers of other types of products are now surveying customers to determine interest in a product.

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Many retailers are addressing demand spikes by increasing the amount of inventory on hand so they don’t lose the sale.

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