The holiday season has the potential to bring joy to revelers the world over, but it can also strike fear into the heart of an unprepared retailer. To maximize the revenue potential of a peak season and meet customer expectations, there are multiple factors that retailers must consider—from consumer demands to channel alignment to supply chain execution preparedness and beyond. It may sound daunting, but by taking certain steps ahead of time, retailers can prepare for demand spikes, ease the stress of the holiday season and join in on the merriment.
Let’s take a look at the top five ways to ensure success during the holiday madness.
1. Prior Planning Prevents Poor Performance
It should go without saying that taking the time to properly prepare for busy periods can help alleviate problems and improve performance. While the winter holidays are often thought of as the key peak season for retailers, spikes in demand can come any time of year, and vary significantly based on the retailer and the market. Holistic planning is necessary to address these peaks, no matter when they occur.
Planning out the year in advance can help retailers minimize surprises. Historical and forecast volume data provides valuable insight into when peaks are expected, and how well warehouses and supply chains are equipped to manage them. Once peak times are identified, managers should build a checklist of the key activities to accomplish ahead of the spikes and share that timeline with all vested parties. Developing a clear project plan, with objectives and specific dates, is important, as is reaching out to key business partners and vendors to review plans and secure their support.
Regular testing of back-end functionalities is another critical step in the preparation process. Volume performance tests help identify potential problem areas well in advance and give organizations time to correct any issues before demand spikes. Test early and test often to ensure your organization is ready to handle the volume, and hit the ground running when the orders begin pouring in.
2. Train Up Your Temps
Hiring temporary workers is a common practice during peak times. A large organization could potentially hire thousands of temporary workers to assist with high order volumes. Some parcel carriers hire 90,000 seasonal employees to help with all of the added shipments, many of which are date-sensitive and must arrive on time.
It’s easy to see how this influx of workers can present challenges. How do retailers get so many temporary workers up to peak productivity quickly and efficiently? Developing an easy process to administer new worker profiles to ensure all new workers have access to the systems and tools they need, and to review security procedures and regulations is an important first step. This can help new hires get through the onboarding process quickly, enabling a faster turnaround.
Once the above is achieved, the organization can turn its attention to training. A focused, accelerated training program is key and using tools that workers are familiar with, such as iPads and smartphones (or devices with similar interfaces), is a great way to help workers get up to speed quickly. Touchscreens, color interfaces and imagery mirror the mobile apps workers are familiar with from personal use, which helps employees become more adept at using the technology in an accelerated timeframe.
Additionally, use of visual cues and pictures of objects enables temporary employees to pick faster and more accurately based on what they are seeing, which speeds processes and reduces order errors. It’s a win-win for employees, who are set up for success, and the employer, who created more productive workers. The impact of these types of intuitive tools is not limited to temporary workers—they help improve productivity across the board and are a key component in a retailer’s warehouse management arsenal.
3. Get Operations Right
Another key step is to focus on peak planning for operational challenges. For instance, can the current warehouse physically handle an increase in inventory to fulfill the forecast uptick in orders? Or are changes required to individual business processes, such as picking or packing, to accommodate a significant increase in volume? Hold a discovery or design session to determine if altering operational strategies would be beneficial for holiday success. Order allocations or picking strategies may need to be temporarily adjusted to deal with amplified volumes. Replenishment priorities may need to change in conjunction with picking priorities. Consider whether fulfilling online orders requires a completely different approach than fulfilling in-store orders. Whatever the adjustments, take the time to do an operations audit and determine what needs to be tweaked to address high order volumes.
Smooth operations in a retail warehouse are imperative, especially during the peak season. If the warehouse can’t handle increased demand, delivery dates may be missed and customer relationships may suffer.
4. Time for Execution
All of your planning and prep work is done, and it’s time to execute. Be sure to put key metrics in place so that productivity and goals can be easily measured. As the busy season starts, having the ability to monitor operations in real time is critical to ensure that projected goals are met or that necessary adjustments are made. Reporting and analytics tools are valuable during peak periods. Proceeding through peak times without the proper visibility into order volumes, inventory levels, order fill rates, on-time deliveries, late shipments, etc. doesn’t allow the organization to flex and proactively address concerns.
Peak season should be viewed as a mini organizational change and treated as such. Operations are potentially different; there are new faces on the team, and everyone’s attention should be focused on meeting peak demand and achieving success. Invest in frequent team meetings, even during the busiest of times. Ensure each team member is following the prescribed procedures for his or her functional area. Communicate departmental and team-level goals, and give employees visibility into both successes and areas for improvement.
A labor management system that can understand how employees are performing against engineered standards, forecast and plan labor, calculate incentive-based pay and facilitate supervisor interaction with employees via real-time data on a mobile device can be extremely valuable any time, but especially during peak periods when labor efficiency becomes so critical.
5. Review Lessons Learned
When peak season has come and gone, it’s important to conduct a thorough review. This includes cross-departmental internal reviews across functional areas, as well as reviews with key system stakeholders and vendors. How did the warehouse, stores, transportation network and supply chain systems manage the volume increase? Did everything run smoothly? What were the lessons learned? Were there any major problems that need to be resolved for the future? If so, identify and develop a plan to take action and set dates for resolution. It is important to ask these questions, and do a careful evaluation of what worked and what didn’t at the conclusion of the season so that all areas of the business know how their department performed and what can be improved.
Once the post-mortem is completed, move back to pre-peak settings—both systematically and operationally—and start developing the plan for the next peak season. It’s never too early to start, especially while the most recent peak is top of mind.
Peak seasons present numerous challenges, but with proper preparation and regular evaluation, retailers can prosper during these busy periods. It just takes the right mix of planning and discipline. Following the above steps can help retailers enhance service, build customer loyalty, improve sales and, ultimately, learn to herald the holidays.
Adam Kline is the director of product management at Manhattan Associates.