The Black Friday/Cyber Monday period is the busiest time of the year in E-Commerce and Retail.
For most companies selling in these channels they will see a spike in demand unlike anything they’ve experienced the entire year. And if successful they will be seeing growth much higher than the prior year.
But its one thing to sell and take orders for all of these products. It’s quite another matter altogether to fulfill that demand and do it successfully.
The exponential demand increase, in such a short timeframe, will stress any Supply Chain system to the maximum.
How do you ensure that your Supply Chain bends, but doesn’t break?
From an individual consumer perspective the prospect of getting great deals during Black Friday/Cyber Monday is very exciting. Everyone selling online will be vying for a share of the consumer wallet so they will be offering great deals unlike any other time of the year.
It represents the greatest opportunity for any company to boost sales and profits, reach new customers and new markets, and grow their brand recognition.
But it can all go horribly wrong if your Supply Chain is not prepared and able to handle the disproportionately high volume that occurs during this short time of the year.
While the Merchant and Marketing organizations in a company clearly have a lot to do here let’s think about the situation from a Supply Chain perspective:
All of the goods that you need to arrive from your suppliers, and there will be a lot, need to be received and stored already. The unprecedented amount of goods may mean that external or supplementary storage is needed.
With every other company looking for the same storage capacity you may be out of luck or at the very least paying hefty storage premiums.
The strain on storage space for all of these goods is also felt by the Receiving teams. They need to be able to quickly, and accurately, process these receipts because tractor trailers will be lined up outside your docks waiting to drop off their goods and be on their way.
Your inventory records must be impeccable. Remember that during the Black Friday/Cyber Monday period customers will be clamouring online to order your goods, all simultaneously and all independently.
Unless you have a visible inventory counter on your website that shows how many units you have left of a particular sku there is a high risk that you could take in more orders for an item than you actually have in stock.
Telling a customer that you can’t fill their order because you are out of an item will likely result in a lost customer forever.
Even the most highly automated Distribution Centres and Warehouses need people to run them. Most companies do not have a lot of automation in this area.
On top of that the Black Friday/Cyber Monday to Christmas period will see a level of demand dramatically higher than at any other time of the year. This means that you could need anywhere from 3-1o times more staff for only 2-3 months.
You need to bring on an enormous number of untrained people for a short period of time. You need to be able to find them, hire them, accommodate them, train them, and retain them.
This will also happen during a time of year when everyone is scrambling to hire and retain the same people. A slight increase in the wage rate or benefits for these people will cause them to go elsewhere.
On top of that you will likely need to ensure that you have 24-7 staffing coverage. This requires trained management infrastructure as well. Your maintenance teams will need to be available to deal with any operating issues. And your I/T teams must be on high alert.
All of your I/T systems will be strained like never before. The order management system, warehouse management system, and transportation management system will see incredible amounts of activity.
If your I/T team hasn’t stress tested your system and created backup systems and contingencies then your house of cards can collapse very quickly.
If you are successful in taking in orders, processing them in your Distribution Centre, and getting them on the dock ready to ship you are in good shape but the job isn’t nearly done.
Remember that there are a limited number of carriers, trucks and planes available to pick up your goods and deliver them to your customers. Everyone will be looking for carriers to pick up and deliver goods.
Even if you have contracted with these carriers to handle your load there are a couple of additional considerations. If your volumes far exceed your forecasted demand then you could be scrambling to find other logistics service providers.
Additionally you are counting on these carriers to have done the work to ensure they have installed the extra contingencies and capacities that they need.
They will have the same pressures on business processes, systems, equipment, staffing and capacity as you do. To compound matters further they are dealing with dozens, hundreds, or even thousands of customers just like you all counting on them to deliver your goods to your customers.
Even big organizations like FedEx, DHL and UPS, USPS and Canada Post, and others will be stressed to the maximum.
Ensuring that you have contingency plans in place to deal with potential delivery issues is critical.
You must know that your Marketing team is scrambling as well. Despite months of preparation they will also be executing plans to make promotional decisions on the fly.
Certainly they will have preplanned promotions which you must ensure you are aware of in advance. This prior knowledge may allow you to position goods in your Distribution Centre to allow for more rapid picking and order fulfillment because you know which goods will be hot.
But depending on how orders are going your Marketing team may decide to offer last minute deals to sell off slow moving goods for instance. If you are not made aware of this in real time it could cause your Distribution Centre staff to be scrambling to catch up.
Ensure that you are aware of any and every move that Marketing is making in real time.
Black Friday Readiness in Conclusion
The Black Friday/Cyber Monday Holiday period can be highly stressful in Supply Chain. Hopefully you have been planning for this all year long and you are extremely well prepared.
But there will be situations that arise that you may not have anticipated. Your ability to quickly and effectively react to and contain these situations will determine if you will be successful.
As I’ve told teams in the past I want the Holiday period to be “Boring” from a Supply Chain perspective. By that I mean that we have done such a great job in planning and preparation that we are able to stresslessly handle this period.
Whatever happens during this Black Friday/Cyber Monday period make sure that you do a Post Mortem to discuss what worked and what didn’t worked so that you can be even better prepared for next year.