Monster masks, superhero costumes, and giant candy bags across the aisle from turkeys, Santa hats and candy canes. Right now, this is a common scene in many stores, which often elicits the comment from shoppers, “It starts earlier every year.” But as someone who works in supply chain management, I just smile to myself when I hear these statements, because they have no idea how early it really starts. For anyone working in retail, as you know, planning for the holidays started several months ago - from analyzing customer purchasing behavior to making projections for the hottest products, increasing production on popular items, and incorporating redundancies into transportation networks to ensure on time delivery.
Online Sales Expected to Increase 7-10% in 2016
As we head into the 2016 holiday rush, we see the dynamics continuing to shift from brick and mortar stores to e-commerce. According to the National Retail Federation, online sales are expected to increase 7-10% this year to as much as $117 billion, which is 10% higher than last year’s holiday online sales projection. Growth is a definitely a good thing, but the changing mix is adding significant complexity and risk of error.
Customers may want to get a jump on the holidays and shop early straining your inventory, or the hot item you predicted ends up sitting on shelves, while a sleeper item ends up attracting mass popularity leaving stores and suppliers wondering if they can meet demand. And understanding and planning for customer demand is just the beginning. Executing the plan requires operations, suppliers and carriers working together to overcome a number of challenges including communications, production lines, transportation and delivery and tracking and billing.
Holiday Season Pushes Supply Chains to the Max
The holiday season pushes everyone’s supply chain management to the max, and is therefore it’s actually the best time to take a hard look at what’s working and what’s not in order to make the necessary adjustments to make next year run more smoothly. For retailers and suppliers who are not fully automated, it allows them to assess how automation might improve their business and make them more efficient for the next holiday season. For the fully automated, they can review where they needed manual intervention to fix a problem, and what can be done to prevent it from happening again next year.
25-Point Holiday Checklist For Retailers
They are brief questionnaires designed to get you thinking about how your supply chain functioned and what can be done to make it more efficient. We encourage you to download this tool and use it as the first step for 2017 holiday planning.
25-Point Holiday Checklist For Suppliers
Another way to improve supply chain management is to learn from each other, both our success stories, and our mistakes. From my time in the industry, I have heard many examples of when, despite careful planning, hiccups occurred in the supply chain and companies had to fill in gaps with manual processes. Whether it involved requiring all hands on deck to resolve a late shipment or out of stock product or at the last minute looking around for short-term staff to fulfill an unanticipated spike in e-commerce orders, at the end often hear from executives, ‘never again.’
But I’m a big believer in transformation, especially when it comes to using technology to improve processes. With advance planning, any ‘never again’ story can have a positive ending. Just consider Best Buy’s example. In 2011, just days before Christmas, Best Buy had to cancel online orders placed by customers on Black Friday because it could not fulfill them. Many customers were left angry and without presents for Christmas day. Since then the company has continually taken steps to optimize its supply chain including refund management, shipping from stores, and opening distribution centers and it has not experienced a disaster on that level again.
Share Your Never Again to Positive Ending Story
I’d like to invite you to share your own Lessons Learned: From Never Again to Positive Ending stories with us. We want to hear about a problem you faced during the holiday rush that you were able to turn around and improve for the future. All participants will be entered into a drawing for an $100 Visa Giftcard and we’ll share the best stories with everyone here.
Have you ever experienced a challenge during holiday season where you said to yourself ‘never again will we handle it this way?’ (Briefly describe what happened).
What improvements did you make to your supply chain so that you didn’t have the same issues?
What happened? Was your next holiday season more successful?
The holiday rush is literally upon us. We know that it’s a trying time for both suppliers and retailers, but it can also be a critical time to evaluate improvements to make your supply chain more efficient and effective.