’Tis the Season…for Omnichannel Hires
For the consumer, the holiday season invokes images of bustling shopping malls, standing in long lines at stores and searching for the perfect gift. But for most retailers, the holidays are the peak season that represents both the strongest opportunities for revenue and the most challenging time for logistics.
Omnichannel’s prevalence and shifts in consumer preferences make shipping requirements in particular a daunting task. UPS and FedEx recently announced massive hiring sprees of 95,000 seasonal employees and 50,000 seasonal employees, respectively, to help handle the high volumes during of the holiday season.
Many retailers and shippers turn to labor management software (LMS) and warehouse management software (WMS) to deal with the complexities of a sharp rise in demand, supply chain pressures and an influx of new workers.
Most notably, e-commerce order fulfillment is very challenging due to the significant increase in demand during the four- to six-week shopping season. E-commerce volumes have been expanding at a rate of 25 percent each year, and the peak season volumes are often 10 to 20 times greater than normal volumes. In addition, two-thirds of holiday shoppers are now considered omnichannel consumers, according to research by PwC.
Omnichannel has challenged retailers in many ways, and use of labor is no exception. With orders growing more complex, workers are picking individual items rather than pallets. And whereas LMS was once restricted for use among warehouse workers, it’s now being considered for retail store workers. These workers are often filling orders from the store, picking and packing from the store, which functions as a mini-fulfillment center.
This activity is driving retailers to find ways to optimize their labor, synchronize processes, and ultimately reduce costs. Retailers want to optimize processes and manage them just like they do in the warehouse. This means measuring how long it takes to perform tasks to eventually standardize processes across their stores. With seasonal employees, LMS is deployed to optimize their time and abilities and actually reduce the impact of holiday pressures on full-time employees, allowing them to focus on their roles.
For most large retailers and shippers, hiring thousands of temporary/seasonal workers is common not just in the front of the store, but also in the warehouse. Common impacts to the warehouse during peak holiday season include:
- Extremely active yards and warehouses operating at full or near-full capacity that are bustling with extra labor resources. It’s not uncommon for temporary processes to be created to deal with the extreme volumes.
- Potential system performance impacts should a company not properly prepare IT assets for the peak season, which includes sufficient mobile hardware, data center processing power (CPU), network, and proactive WMS system maintenance such as purging & archiving of older data.
- Once orders are processed and ready to ship, they must be loaded and transitioned to the carriers for transport. In many scenarios this results in small parcel shipments via companies such as UPS or FedEx, which are also dealing with a massive seasonal volume, hence the nearly 150,000 seasonal personnel noted above. The additional volume is challenging from a parcel perspective in the warehouse because there are specific carrier cut-off times and it’s common for warehouses and yards to run out of open loading docks for the goods to be loaded. Many facilities are set-up to handle the normal state that might involve one or two fully loaded parcel trailers, but during holidays, the operation must adapt to handle perhaps 10 or 20 trailers.
- In addition to maintaining warehouse operations, retailers have to ensure execution on the “core,” meaning shipping to retail stores that are busier than normal, often with expanded collections and product assortments.
LMS and WMS are significant because both help retailers manage the “final touch before the customer” aspect of e-commerce order processing. These tools are essential links in supply chain commerce and can directly impact customer satisfaction during the holiday season. Therefore, they shouldn’t be an afterthought in laying out a solid strategy to handle the demands of peak volumes.