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Supply Chain Planning for the Busy Holiday Season

Michael Wilson | Sep 19, 2018

Holiday spending accounts for over $650 billion every year in the United States alone. Many businesses make the majority of their sales during the holiday season, which is a ...

Holiday spending accounts for over $650 billion every year in the United States alone. Many businesses make the majority of their sales during the holiday season, which is a perfect time to get ahead of managing their supply chains. A sharp spike in any supply chain can lead to disruption, and if a business hasn't planned ahead, they could suffer a potential loss in sales, as the economy as a whole will be churning much faster. Making sure you devote adequate time to supply chain planning ensures you aren't left scrambling when the busy season arrives.

The Major Challenges to Holiday Supply Chain Management

A company doesn't have to be retail-focused or customer-focused to feel the weight of the holidays. During the holidays, all sales activity increases. This leads to an increased need for tools, supplies, and even services. In fact, companies that aren't in the retail or consumer sector may even feel the holidays more, because they aren't used to dealing with traditional seasonal retail volatility. 

Regardless, companies in many industries—retail or otherwise—experiences major challenges during the holiday season that could impact the supply chain. These include:

Weather, Overload, and Theft Issues Regarding Delivery

Delivery services are notoriously erratic and unpredictable when it comes to the holidays. Not only do they need to contend with weather-related delays, but trucks and transportation methods may become overloaded. Items may also be stolen at an alarming frequency, and if you maintain your own warehouses, you may find yourself experiencing increased security risk. All of this can lead to either delayed packages or product shrinkage, and ultimately a loss in revenue. 

Miscommunication Between Vendors and Partners

Your vendors and partners are also going to be experiencing unusually hectic operations. Through no fault of your organization, you may experience issues regarding miscommunication; these issues still need to be dealt with even if your organization didn't cause them. Proactive planning can ease the strain in the communication lines. So, talk to your network earlier in the year and see how you can work together to avoid a communication breakdown.

Running Out of Inventory

Running out of inventory is always a nightmare for any business, as it often means a loss in sales. Individuals purchasing over the holiday season aren't likely to want to wait for their product; in fact, they will often go out of their way to purchase products that will come as fast as possible. Running out of inventory means drastically reducing the amount of revenue that you could have potentially captured over the season, and by the time you get inventory back in stock, the interest may have waned.

Incurring Excessive Costs Due to a Lack of Supply Chain Planning

There's something called "being killed by success." There are situations in which over-selling a product can actually lead to losing money, since the product now needs to be procured separately or manufactured during over-time. Being killed by success can happen if you don't anticipate your own needs, or if you find yourself compensating for unexpected issues such as lost or late products. 

All of these challenges are surmountable—they just require the right supply chain planning. Data analytics and new technologies can make what could be a bumpy ride much smoother.

Solutions for Supply Chain Management During the Holidays

In the world of supply chain management, data is power. If you have the right system, the solutions for the above problems will all fall into place.

To improve your holiday supply chain management:

Forecast Your Consumer Trends and Demands

You can't fulfill your customer's needs if you don't know what those needs are. Deep analysis is needed to forecast your needs over the holiday season—and while excess or waste is never desirable, you should also have a buffer in place that suits your potential margin of error. By forecasting customer trends and demands and working this into your supply chain planning strategy, your organization will be able to reduce its risk of running out of products and will be able to fulfill requests on time. 

Streamline Your Internal Processes

Assume that some packages will go missing: what is the process to re-deploy these packages with ease? Assume that some supplies will not arrive on time: what is the process to acquire more supplies and notify any relevant parties of delays? Having these streamlined internal processes mean that issues that will arise during the holiday season won't necessarily disrupt your operations. Instead, they will become a part of "business as usual."

Improve Your Supply Chain Visibility

For better customer service and efficiency, implement better supply chain visibility. Through the right logistics and management suites, products can be more easily tracked and manipulated by the customer, streamlining your own administrative operations and leading to more satisfied customers.

A significant portion of supply chain management lies in relying upon and acquiring the best technology. Through the right supply chain suite, you will have the data that you need to avoid most of the major supply chain disruptions. Without the data that you need and without adequate supply chain planning, however, you could find yourself easily running out of product, failing to meet production, or experiencing significant delays in product fulfillment.

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