Peak seasons always pose a challenge for supply chains. In recent years, these times have grown even more difficult to navigate, with COVID-19’s lingering impact, labor shortages and wildly shifting demand causing industry-wide ripple effects. However, peak season shipping is still manageable with the right strategy.
As eCommerce grows and pandemic-era economic cutbacks fade, peak seasons will likely become increasingly demanding. Here are seven ways supply chains can manage these high volumes this year and beyond.
Automate Administrative Tasks
Automation is an excellent tool for managing peak season shipping volumes. One of the best and easiest areas to implement this technology is administrative work like ordering, billing, scheduling and data entry.
Employees typically spend just 27% of their time on skilled work, with non-value-adding tasks and strategizing taking most of their time. If supply chain organizations automated non-value-adding administrative work, they would give their workers far more time to spend actually managing peak volumes.
As labor challenges make it increasingly difficult to hire seasonal labor, this schedule clearing is becoming invaluable. Robotic process automation (RPA) and warehouse management systems (WMS) can free a workforce to accomplish far more despite having fewer people. Skyrocketing demand won’t be as disruptive as a result.
Automate Physical Tasks
Some companies can take automation further by bringing it to physical processes. Robotics and similar automated systems can help move materials, pick items and more to support supply chain organizations in accomplishing more work with fewer workers.
These systems are often expensive, but productivity savings and decreased labor costs make up for the expense over time. Facilities can accelerate these ROIs by first automating their most inefficient and easily automatable processes before slowly expanding to other workflows.
Item picking is typically the biggest culprit in this area — as it’s error-prone — and employees spend most of their picking time walking. Automated picking robots can pick items faster and with fewer errors, thanks to more maneuverability and computers’ precision. Implementing these systems will also let workers who would otherwise pick items focus on other tasks, further boosting productivity.
Consolidate Digital Platforms
Another strategy to manage peak season shipping volumes is to reduce digital sprawl. Managing a supply chain often involves using many separate tools and creating data silos, which make it difficult to get the whole picture. That can slow things down with high volumes, so consolidation is crucial.
Warehouses should look for feature-rich WMS solutions with multiple integrations to bring their disparate digital platforms together. When supply chain managers can see all they need from a single window, they can make more informed decisions. Eliminating the need to switch between platforms and re-enter data saves time, too.
This consolidation will also make it easier to automate parts of the process. RPA tools can accomplish more when they only need to apply to one platform to access multiple workflows.
Shop Rates Between Vendors and Partners
Another challenge supply chains often encounter during peak seasons is high rates. As the world’s logistics networks struggle to keep up with demand despite lingering challenges, these rates may be even higher than average. The solution is to shop between various vendors instead of relying on a single, familiar partner.
Some vendors’ high volumes let them offer lower rates, as they’ll make more overall, even with lower profit margins per item. Who offers the lowest prices may vary year to year and even order to order, too. Rate shopping for each shipment will help find and capitalize on these differences, minimizing operating costs.
Once again, automation can help in this area. Automated software tools can compare rates for different shipments and automatically print the cheapest label so workers don’t have to rate shop manually.
Many supply chains may have to adjust their operational philosophies as peak seasons approach. While lean, just-in-time strategies have dominated the industry, these often aren’t ideal amid spiking or uneven demand. Opting for a more flexible approach may reduce disruptions.
It can be challenging to anticipate demand shifts in peak seasons and third-party services, rates and capacity may change, too. Consequently, minimized inventories and single dependencies are likely to create obstacles.
Supply chain organizations may want to diversify their vendors, 3PLs and other third parties to give themselves more flexibility should unexpected disruptions arise. Similarly, companies can use temporary storage to expand in-house inventories for the season, helping avoid shortages. These changes don’t have to be permanent, but they can help adjust amid seasonal changes.
Optimize Reverse Logistics Processes
While outgoing shipments may be the focus of most operations, it’s essential to remember reverse logistics. U.S. consumers return 20.8% of online sales, so if companies don’t prepare to handle these returns, return volume spikes amid peak seasons could quickly become overwhelming.
One of the best strategies for peak season shipping returns is to separate the inflow from the outflow. Allocating extra space for reverse logistics — even if it’s just temporary — does incur more costs, but productivity savings and disruption prevention make up for them.
Without dedicated returns spaces and workflows, inbound and outbound logistics can easily get mixed up, leading to potentially costly errors and delays. By contrast, if supply chains prepare and allocate resources for a spike in returns, they can ensure the two sides don’t interfere with each other. This organization will make managing rising incoming and outgoing volumes far easier.
Manage Customer Expectations
Finally, companies should manage their customers’ expectations ahead of time. Some delays may be unavoidable, regardless of the other steps taken, but businesses can mitigate these by ensuring they’re not unexpected.
As peak seasons approach, tell customers the rising demand and industry rate shifts may increase their shipping times and costs. If they expect these disruptions ahead of time, they’ll be less disappointed when they happen. Consequently, delays or higher-than-average expenses are less likely to impact customer loyalty.
Transparency is always the best policy — especially in stressful times — as many peak seasons are for consumers. Managing expectations will help earn and retain customers’ trust, minimizing any fallout from potential disruptions.
Utilize These Strategies to Help Manage Peak Season Shipping
Peak season shipping volumes are always challenging and will likely become more so this year. While that may be an intimidating prospect, the peaks don’t have to cause widespread disruption if companies prepare accordingly.
These seven strategies will help supply chains of any sector and size manage uneven demand spikes. They can then minimize costs and maximize returns in these seasons, ensuring current and future success.