Festive celebrations are a global phenomenon, marked by a rich tapestry of traditions and customs unique to every region. Whether it’s the resplendent lights of Diwali in India, or the vibrant festivities of Brazil’s Carnival, these occasions transform societies into pulsating hubs of activity. Yet, behind the scenes, retailers grapple with a formidable challenge: tackling surges in demand and steering through the complexities inherent to these seasonal peaks.
Unsurprisingly, the festive season often witnesses a remarkable increase in online sales, with reports indicating a year-on-year surge in certain regions. During the 2022 holiday season alone, global online consumer spending reached an impressive sum of $1.14 trillion, with $270 billion specifically contributed by consumers in the United States. This sudden spike can strain supply chains, resulting in inventory shortfalls, protracted lead times, and swamped operations. Moreover, almost a third of businesses grapple with excess inventory, a consequence of overestimating demand during these periods.
Actionable insights and pragmatic strategies can help businesses to fine-tune their supply chain for these seasonal ebbs and flows, irrespective of the specific festival or geographic location. We’ll delve into tactics aimed at bolstering inventory management, enhancing logistics, and surmounting staffing challenges often experienced during these high-demand periods. With these strategies in place, your business can avoid inventory shortages, curtail surplus stock, and deliver a streamlined customer experience.
How to Overcome Festive Logistics Challenges
Don’t worry, we’re not talking about figuring out how to get a Christmas bonus to buy those diamond earrings for your wife. We’re referring to the real challenges that can hit hard during the holiday season—meeting service level agreements, ensuring timely supply of products, managing employee absenteeism, and more. Here’s a guide on overcoming these hurdles to maximize the season’s greetings:
1. Demand Forecasting:
The unpredictable nature of customer behavior during the holiday season makes demand surges difficult to anticipate and demand planning even more difficult. However, with the availability of demand forecasting software, retailers can minimize their efforts. These tools generate automated demand requirement results that can be adjusted based on external factors and management expertise, providing a more accurate picture.
2. Inventory Management:
Once demand estimates are obtained, retailers can proactively stock up on the necessary products. Since lead times vary depending on the nature of the product, it’s crucial to order based on delivery duration. For example, products like toys may have longer lead times than chocolates. Considering the inexplicable rise in demand during the festive season, it’s advisable to place orders well in advance to ensure product availability leading up to the holidays.
Read also: Multi-Echelon SupplyChain Inventory Optimization – A Mathematical Perspective
3. Addressing Workforce Shortage:
The holiday season is a time for families to reunite, resulting in employee absences. However, increased demand necessitates a larger workforce to meet customer needs. Forcing employees to work on holidays can lead to negative consequences for everyone. Instead, motivate your employees to voluntarily work on the busiest days by offering incentives like overtime pay or floating holidays. Implementing shift rotations ensures employees have fair opportunities to spend time with their families. Remember, happy workers are efficient workers—Santa’s little helpers were never forced into a sweatshop-like environment.
4. SLA Adherence:
During the holidays, with travel and gift deadlines, timely delivery is crucial. Fortunately, advancements in AI-backed technology over the past decade have made on-time deliveries easier. Dynamic routing platforms like Locus intelligently plan delivery routes by considering operational constraints and real-time traffic, ensuring packages are delivered within the promised time slot. Companies even offer solutions to simplify and convert ambiguous addresses into exact geographic coordinates, minimizing delivery delays.
5. Weather Constraints:
While walking in a winter wonderland may be delightful, delivering packages in knee-deep snow poses challenges to employee safety. Using workflow automation, automated recommendations for the best-suited vehicles can be made based on weather constraints, shipment volume, type, vehicle capabilities, stop durations, and delivery timings, all while considering real-time climatic conditions.
6. Inventory Shortage:
When a highly demanded product is scarce or difficult to procure, retailers can use a clever strategy to boost sales during and after the holiday season. Let’s say a particular toy is in short supply but has high demand. By heavily advertising the toy to children within your marketing reach, their insistence on receiving it becomes relentless. However, due to limited stock, the toy may sell out before the holidays. As a result, parents buy alternative toys to make up for the promised one, acting as a temporary solution. Later, when the toy is back in stock after the holidays, parents fulfill their original promise by purchasing the toy, resulting in additional sales.
How can SaaS Transform Logistics Operations during the Holiday Season?
As the holiday season brings fluctuating customer demand, businesses need efficient solutions to handle the logistics challenges. SaaS (Software as a Service) platforms offer the following benefits to supply chain businesses:
1. Reducing Last-Mile Delivery Costs:
One of the major concerns for logistics businesses is the high cost of last-mile delivery. SaaS solutions provide detailed insights into last-mile delivery costs, including idling costs, loading costs, and driver costs. This helps logistics managers optimize their operations with limited resources, improving asset utilization without the need for in-house IT staffing or upfront capital investments.
Read also: A Study of Unit Economics in Last Mile Delivery
2. Advanced Route Planning Capabilities:
Efficient route planning is crucial to ensure on-time deliveries during peak seasons. SaaS platforms offer advanced route planning capabilities, allowing drivers to meet multiple delivery deadlines and requirements. These solutions consider real-world constraints like traffic and rider skill sets, automatically generating optimal routes even when additional on-demand orders are added. This ensures efficient delivery while saving fuel costs and time.
3. Improved Dispatching Capabilities:
During peak season sales, businesses face the challenge of managing increasing delivery orders. SaaS solutions provide automated dispatching capabilities, allowing fleet managers to assign tasks to delivery executives based on their location, skill sets, and availability. Ad-hoc deliveries can be easily assigned to agents close to the delivery destination, ensuring effective delivery load management.
4. Real-Time Visibility:
Tracking deliveries becomes more challenging during peak seasons due to high volumes and customer expectations. SaaS solutions offer real-time visibility, enabling logistics managers to track fleet movement and on-ground activities. These solutions provide insights on delays, wait times, failed deliveries, and more, eliminating delivery delays and enhancing rider productivity. Fleet managers can also monitor overall driver performance, helping them manage demand more effectively.
5. Active Communication through Notifications:
Communication gaps between customers, agents, and managers can negatively impact the customer experience. SaaS platforms facilitate efficient communication by sending delivery tracking links to customers, allowing them to track deliveries in real-time. Notifications about upcoming deliveries, along with customer location, help bridge the communication gap and improve the last-mile customer experience. Customers can also schedule deliveries digitally, enhancing control and transparency.
6. Enabling Contactless Deliveries:
SaaS baseddispatch management platforms offer electronic proof of delivery, allowing delivery agents to validate completed deliveries through photos instead of physical signatures. This helps eliminate fraudulent returns and reduce failed deliveries.
Leveraging SaaS technology can greatly enhance logistics operations during the holiday season. Locus is a global customer experience and dispatch management platform that utilizes deep learning and proprietary algorithms. It provides route optimization, real-time tracking, insights, analytics, beat optimization, efficient warehouse management, and vehicle allocation and utilization all in one place.