Black Friday is almost here!
Retailers have been anticipating and preparing for this over the last year. It has become the biggest online shopping period of the entire year with expectations for exponential growth over last year.
Further this period is so dramatically busier than at any other time of the year that it has an absolutely enormous impact on the Supply Chain of these companies.
In fact the readiness of the Supply Chain can make or break the success of Black Friday for most any company.
With so much at stake how do companies make sure that their Supply Chain is ready?
Ideally companies would have had some kind of post-mortem review of last year’s successes and failures, and this year’s growth plans, to establish a set of actions that have been worked on and implemented all year long.
Many of these improvements could only have been made over an extended period of time. Changes in I/T systems and transactions, the addition of physical capacity, deep business process improvements, changes in personnel, sourcing decisions, logistics arrangements and resource on boarding must all have been completed by now.
If not then you really are in trouble!
But most companies will by now have made the improvements and arrangements that they have believed are necessary.
So are there any Last Minute Supply Chain activities that can be done to further improve the chances of success during the Black Friday Holiday season? Because once Black Friday is here the volume of activity will be so high that there will be no further opportunity to make changes. It will be all about execution at that point.
Here are some thoughts on Last Minute Supply Chainchecks to be made to ensure your readiness?
Do you have enough Human Resources?
Whether you are running a Distribution Centre, a Logistics operation, or Customer service all of these operations require human resources. And at this time of year you need more people than ever before based on very aggressive forecasts. These people must also be trained to some level of competency.
Invariably the demand during this period can far exceed the already lofty forecasts. This immediately creates a demand for even more people than you have brought on board. On top of that every other similar business in your community is competing for the same resource.
Key last minute preparation items should then include checking whether your Human Resources team has an ability to immediately bring more people on board and train them quickly. Further check whether you have plans in place to offer incentives to hire and/or retain people if needed. Also test whether you have enough Management available to help manage the extra people, including staffing additional shifts if you are not already working 24/7.
Can your I/T Operation and Systems handle the Peak loading?
Especially as it pertains to E-Commerce and Online ordering and the rest of your operations, your I/T Systems and personnel will also be strained to the maximum possible level. If your promotions and planning are successful then you will have customers buying and ordering goods at a phenomenal rate.
That is a great situation. But only if your systems and your operations can handle the load. If your systems go down than customers will go elsewhere or you won’t be able to fill the orders that you’ve already taken. This would be a disastrous scenario.
In some cases companies either have a secondary test platform in which they are able to stress test their systems offline. Or they may run a promotion or sale in close advance of Black Friday to see how the systems hold up. Whatever your situation any last minute pre-testing that you can do to work out any bugs or problems will be well worth your effort. This includes the systems of any service providers as well.
Additionally you need to ensure that your I/T personnel and I/T partners or service providers are on call 24/7 during this period. A trial run to test this out should be possible.
Are your Logistics Partners ready?
Your Logistics partners are also servicing many other customers with the identical peak demand pressures that you have and at the same time. Their capacity with respect to their vehicles, drivers, and facilities is also being strained to the maximum.
Several years ago big companies like FedEx and UPS were unable to handle the enormous Holiday season demand. They added capacity and improved processes. Every carrier faces this same issue year after year.
By this point you certainly want to understand what options you have with your existing carriers. However you may also want to reach out to logistics companies that you don’t typically do business with to ensure that you can use them if needed.
Most everyone should be also be looking for extra logistics partners. As such you may also want to ensure that you have a last minute plan to pay for premium, expedited freight if it becomes necessary. The extra cost will certainly eat into profits but not nearly as much as the sales and profit impact of lost and disappointed customers!
Is your Distribution Centre ready?
At this stage you won’t be able to make any major changes to your Distribution Centre solution. If you have a Distribution Centre service provider you certainly need to review their readiness plans.
Any last minute stress testing of your operation and processes will prove valuable.
Can your Receiving docks handle the enormous influx of product? If you can’t receive the goods then you have no chance of processing and shipping orders. Do you have any process equipment running 24/7, or do you have the ability to increase the number of hours that this equipment is running? And do you have enough equipment to handle the disproportionately high number of packages and orders that are going to be shipped?
Wherever it is economically feasible it is prudent to add additional equipment capacity. Further you must have a commensurate maintenance support strategy including spare parts and trained maintenance personnel. No customer will find it acceptable that they couldn’t get their order because a piece of your equipment was down and you couldn’t get it back up and running.
Distribution Centre readiness must also include the state of your inventory. Any inventory discrepancies or inaccuracies will be highly problematic. If your physical inventory varies either up or down from your inventory records then you will misrepresent your product availability to your customers. This will certainly result in either lost sales or missed commitments.
For some companies they also either use, or have the ability to use, Drop Shipping as an option. This generally enables you to bypass the time-consuming (and wasteful) activity of shipping products to a Distribution Centre which turns around and ships the goods to Customers. Instead your Supplier can ship directly to your Customers. There are advantages and disadvantages of this model but in the heat of the Holiday season it may be a contingency you want to consider.
Is Supply Chain completely aware of all Promotions and Marketing Plans?
Marketing is appropriately focussed on driving the maximum possible volume of sales. This is their biggest opportunity of the entire year.
There will be a planned set of promotions, offers, and sales mechanisms that Marketing will deploy during the Holiday period. But if the Supply Chain team is not completely aware of all of this activity then the potential for failure is very real!
Some companies will promote different Hot products, for instance, at different hours on different days. If the Last Minute Supply Chain team is aware in advance then it can physically position the inventory of those Hot products such that it will be able to fulfill those orders quickly and efficiently. Additionally the Supply Chain team must ensure that the have those goods in stock.
A last minute Supply Chain review of promotional and sales plans between Marketing and Supply Chain can highlight any problems with some time to fix the issues.
Any last minute calls to Suppliers or Carriers to ensure those goods are delivered on time are critical. If there is no inventory available then the planned promotion is dead in the water.
Last Minute Supply Chain Preparation
Black Friday and the Holiday season are an exciting time of year. But this can also be a highly stressful time, especially if things aren’t going well.
With Black Friday so close there is only enough time to make last minute Supply Chain checks, tests, and relatively minor improvements. And any options for providing additional contingencies, capacities, or redundancies should be considered seriously.
Certainly this must include the creation of an Emergency Response Team. If you do get into trouble during this period you must react quickly, decisively and effectively.
My direction to teams in the past is that if we have done our job properly than this busy time of year should be “boring”. That does not mean that it will not be extraordinarily busy.
But it does mean that you have done enough planning and strategizing to build a highly effective and robust Supply Chain able to competently cope with Black Friday and the Holiday season.