5 Tips for Preparing the Distribution Center for Peak Season
The 2013 holiday season was marred by a combination of major winter weather, delayed shipments and disappointed consumers. Retailers, shippers and distributors are all trying to achieve supply chain success this holiday season, but ensuring a seamless end-to-end process is easier said than done.
One of the most important elements for retailers hoping to see a smooth holiday season is an efficient and effective distribution center, the lifeblood of a supply chain.
Omnichannel pressures on retailers are driving the need for a strong fulfillment infrastructure to effectively manage customer orders, no matter where they originate. Companies must respond to these new demands in order to deliver a great customer experience while simultaneously fulfilling orders profitably.
Preparing the distribution center to handle the strain of the holiday orders and permit the supply chain to be flexible and agile is central to holiday season success.
Here are 5 tips to prepare the DC for the peak season:
- Benchmark DC systems to handle the volume. In the e-commerce era, peak volumes often spike dramatically, sometimes reaching 10 to 20 times their normal size. Some facilities see orders soar ninefold — but taking nine times as long to meet demand isn’t an option. If your system isn’t ready for the increase, you’ll face productivity problems.
- Plan for increased staffing needs. How many shifts do you plan to run during peak season? How many temporary workers will you hire, and what sort of tasks will you allow them to handle? It’s best to answer staffing questions early. If you aim to keep your workers happy, you should also think about some sort of incentive plan that pays bonuses for workers who thrive during a very active time.
- Get out from behind the desk. Manhattan Associates’ research finds many managers and supervisors spend 60 percent or more of their time behind their desks. Solutions such as mobile labor management systems let companies track production from a tablet—allowing managers to spend more time away from the desk to check in on performance issues or production lags.
- Set order deadlines earlier. The holiday season can become chaotic in part because retailers might promise items ordered right before Christmas would arrive in time. Moving your order deadlines a day or two earlier is likely to reduce much of your last-minute stress and set more realistic fulfillment expectations with consumers.
- Make your inventory omnichannel. For a handful of huge retailers, it makes sense to divide inventory into one stream for store replenishment and another for e-commerce fulfillment. But for most other companies, it would be wise to tear down the walls separating types of inventory. You’re placing undue stress on the DC when the same product is divided into different segments.
No matter how much you prepare, peak season is always difficult. The omnichannel landscape is competitive, and consumers have proven willing to share their displeasure with late or incorrect orders on social media. Distribution center mistakes can be mitigated by following the simple steps above, which will help create a more cheerful—and profitable—holiday season.