Analysis

Opinion: Optimising your logistics chain during peak times

December is a time of celebration, festivity – and for the logistics sector, intense pressure. John Perry, MD at Scala, writes about how retailers can cope with the seasonal spike.

It’s Christmas, companies are scrambling to get their deliveries completed in time and order fulfilment is top of the agenda. Most businesses are already operating at full capacity and extra resource has been brought in. The strain on the supply chain is at its peak, and the pressure to ensure sure young ‘Steven’ gets his favourite gift on time is at an all-time high. So how do businesses cope? What strategies do they put in place to ensure their logistics chain is robust enough to see them through the season?

The Christmas peak is no surprise. It comes around every year, and every year there are winners and losers. Sadly, Ocado made the list of last year’s losers after it failed to deliver customers’ Christmas turkeys on time. Ocado put its Christmas delivery failures down to a shortage of drivers on the road, but how did this happen, and why hadn’t the online supermarket giant forecasted this spike in demand and planned ahead accordingly?

By this point in the year, most retailers will have reviewed last year’s state of play. They will have gone through the order data with a fine-toothed comb, looking at how many orders came in, how many were fulfilled, and how many were late. Equipped with this data in hand, they’ll have then made their forecasts for this year. All businesses of a certain age have access to their own legacy data, providing an indication of demand year on year. It’s what they do with this data, and their understanding of seasonally changing consumer demands that counts.

Once all ducks are in a row and the supply chain is set, it’s still not time to sit back and relax. There needs to be a series of contingency plans in place that speak to every eventuality – clearly, with Ocado, this was not the case, as once the fleet had been maxed out, it was game over.

Flexibility is key. A business needs to be able to scale up and scale down according to demand. If more fleet is required, it needs to be in a position to immediately switch this on, drafting in third-party, reliable drivers as and when required. Thorough background checks should have already been done on all potential third-party suppliers, ensuring they’re reliable, flexible and have a good reputation.

The same stands for any temporary staff. At this point, a business should have all its extra resource planned. However, it still needs to have options to upscale if required. Are you working with a reliable agency? Can you call them up at the drop of a hat, and will they supply you with decent, dependable staff? These are all questions a supply chain and logistics manager should be asking themselves. A business might find that extra resource needs to be drafted in last minute on Boxing Day for example; this is something an agency should be able to turn around, without any issues.

During busy times, a constant watch should also be kept on shift patterns. Sometimes shifts might need to be tweaked to reflect demand, with both drivers and warehouse operators having to work slightly different hours to what they’re used to. If there aren’t enough feet on the ground at a particular time of day to pick and pack, orders won’t go out. Likewise, if there aren’t enough drivers on the roads at certain times of day, orders won’t reach the customer.

Something that often gets overlooked during peak times is communication with suppliers. Supply chain and logistics managers should be in constant conversation with their suppliers to ensure they can meet demand. The supplier could be operating on skeleton staff or have an event on that’s draining resource. These breaks in a supply chain can have a huge overall impact and delay orders leaving the warehouse. Broken links in a supply chain mean loss of sales and loss of sales mean loss of profit, ultimately spelling disaster.

Christmas is a stressful but exciting time for retailers. Things can go wrong but things can also go very right. Usually it’s the businesses that have prepared that come out on top. However, even the most successful of businesses need a little extra help here and there.

Successful supply and logistics chains don’t have all the answers and often need outside support during busy peak times. The most effective and guaranteed way of improving efficiencies, is seeking the advice of an experienced team that is passionate about innovating supply chain improvements and dedicated to providing independent objective expertise.