The Black Friday/Cyber Monday shopping extravaganza is almost upon us. While it may seem like a long time for functions such as Marketing or Sales, for your Supply Chain the Black Friday push should be on right now!
If you have products manufactured overseas for instance then if those products are not either on the ocean right now or en route over land to your Distribution Centres then you are already in trouble!
The success or failure of the biggest shopping period of the year, Black Friday and Cyber Monday, depends on a lot of things coming together involving all functional areas of your company. Last minute preparations to work out the kinks on promotions or to make tweaks on your website can continue right up to when the ominous, and exhilarating, Black Friday clock strikes midnight.
But if your Supply Chain is not ready RIGHT NOW then you will have a rocky, stressful , and potentially disastrous Black Friday period.
What are the elements that should be in place to ensure that you have a successful Black Friday period, at least in terms of your Supply Chain readiness?
Complete Supply Line Visibility
Whether your goods are still being manufactured, in transit, or they are already in your stores or Distribution Centres, you need to know where your goods are. When you are in the middle of the Black Friday period it is too late to learn that your products are not where they are supposed to be.
Now is the time to identify any problems or delays in getting your products where they are supposed to be. You still have time to deal with supplier issues, transportations delays or fulfillment problems. It’s much easier, less expensive, and less stressful to fix these supply line issues now. But you can only know about these issues if you have that visibility.
And the issues in your supply line are more than just about delivery quantities. If there are quality problems, or specification issues, you need to know of these quickly so that you can take the steps necessary to get these corrected. Even though time is not on your side you still have some time left to get these things done.
Fulfillment Solution Readiness
For most Retailers the Black Friday/Cyber Monday and Holiday season product has already started to flood in to their Distribution Centres. The seemingly endless tsunami of product is hitting them now and will not ease up until likely late November or early December.
This is an early test of the readiness of your Fulfillment solution whether you have your own Distribution Centre or you are using a partner to provide this service. Generally the Distribution Centre needs to have any system upgrades and performance enhancements in place now. There will be no time for making changes later. The process and procedures that you have now must be robust enough to withstand the overwhelming strain of the Holiday season.
Your Distribution Centre will also have to already been recruiting, training and staffing the personnel needed to handle this phenomenal workload bubble. If you wait too late to bring temporary personnel on board then they will not be sufficiently trained when the volumes, and the stresses and pressures, are at their peak. At that point quality issues will occur, deliveries will be missed and costs will soar all because you did not manage your staffing solution well.
Further there will be a ton of other companies competing for the same people you are trying to recruit at the same time. This will continue during the Holiday period so the risk of attrition, and need to backfill people, will occur at the worst possible time of the year.
Physical space will be the other issue that will face you. Likely during the rest of the year you have a lot of available space in your Distribution Centre. But when the volumes and activity are at their highest you run the risk of not having enough space in Receiving, in your Storage areas, and in your Processing/Packaging areas.
This problem happened to me many years ago. In mid-September we ran out of space. The product was still arriving in record quantities. But we ran out of space to store the goods until it was time to send them out to the stores. Receiving backed up and trucks and trailers overflowed the parking lot. We were on the verge of shutting down the operation due to this bottleneck.
And finally if you have Omnichannel fulfillment channels aside from your Distribution Centre (eg. physical stores, drop ship vendors) then you need to ensure that the processes, tools, systems, staffing and materials needed by each of these entities is in place and debugged.
How frustrating is it to see that a company has advertised a great deal only to find that the product is out of stock when you go to order it online? How does that happen?
Black Friday/Cyber Monday should be the time of year when the communications integrity between your Merchant, Marketing and the Supply Chain teams are at their peak. The Supply Chain must know exactly what the promotions are and they must be able to confidently assure everyone that the product is in place in the appropriate channels to support the promotions strategy.
The Marketing team and the Merchants can quickly get caught up in trying to create last-minute promotions and deals to capitalize on the latest market intelligence. This is great and everyone should support these opportunities for growth. But if the Supply Chain team cannot support the last-minute promotions with the product necessary to meet customer expectations then there is a more dangerous risk of disappointing customers and losing them.
Logistics Delivery Channel Readiness
As with every other part of the Supply Chain the strain on your logistics engine will be highest at this time of year. The largest companies like FedEx and UPS must constantly add capacity and capability to meet the ever-increasing volumes and demands for the latest possible delivery.
Customers will order your products in the Black Friday/Cyber Monday period all the way up to December 24th. And they will expect that they will have those items arrive so that they can be under the Christmas tree.
But your Supply Chain team must know that every other customer is making the same promises to their customers. All of this puts a phenomenal strain on the Logistics and Transportation companies. You must work with your delivery partners to communicate your expectations, understand their capacity and limitations.
And then you must translate that into a realistic delivery commitment schedule that can be communicated to your customers. There is no point in promising to deliver something by December 24th if your logistics partner can not meet that commitment. You will lose customers and jeopardize your business if you make false promises.
And none of this can work without readiness in your IT systems and infrastructure. The IT systems have a relatively light load during the rest of the year. But during the Black Friday/Cyber Monday period your order management, distribution, allocation, replenishment, and financial systems will be subject to a level of transactional activity that can be many orders of magnitude higher than ever before.
This is not the time of year when your system can go down. If there is any disruption at all your then your customers will instantaneously go to your competitor’s website. They will abandon their orders, they will tell friends about their bad experience with you, and you will find that those orders are lost forever.
While there are certainly enhancements and improvements that have been made to your IT system since last Holiday season, and your growth expectations are even higher, you must ideally test your systems at peak volume, off-line, prior to the Holiday season. The risk of failure is too great otherwise.
The Black Friday/Cyber Monday Holiday period can be exhilarating. While you want to be able to handle more orders than ever before, if your Supply Chain is not ready then you will very likely fail.
Look over the entire ecosystem of processes, resources, tools, equipment and materials that constitute your Supply Chain. Test the capabilities and readiness in all of these areas in advance.
From a Supply Chain perspective most organizations are dealing with the higher Holiday volumes right now. So problems and kinks are being experienced today. Work out these issues, fine tune your readiness for Black Friday/Cyber Monday, and increase your preparatory plans.
If you do this correctly then your Supply Chain will perform well. While the volumes will be higher than ever before your Supply Chain team will handle it easily. Make your Holiday season busy, but boring, from a Supply Chain perspective.
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