The peak holiday season is upon us, with retailers across the globe racing to prepare their supply chains. One of the biggest issues companies face during the months when demand is highest can be attributed to inventory. Over the past few years, e-commerce and omnichannel purchasing have completely transformed the retail industry. Sellers have been presented with an overwhelming amount of complications and complexities when it comes to maintaining profits while also speeding up delivery times and managing consumer expectations.
In these weeks leading up to the holidays, when more orders are being placed through a growing number of platforms, it is crucial for supply chain managers to ensure that they have the proper facilities, tools and processes in place - ready to handle the influx of sales coming their way. To be blunt, retailers can't afford to mess up during peak season. As industry expert Vivek Sharma explained in a LinkedIn post, the National Retail Federation has found that as much as 40 percent of retail companies' total revenue can be attributed to holiday sales. So it's not hard to see why making sure customers are satisfied and operations go smoothly is incredibly important.
Retailers have always had to deal with busy and sometimes tumultuous times during peak seasons. However, if they thought the obstacles they were presented with in the past were as bad as it gets, they may want to revisit that notion. According to eMarketer, this year e-commerce retail sales for the holiday season are expected to increase significantly, forecast to grow by about 16 percent (compared to total retail sales, which are expected to rise by no more than 4 percent).
Tips for improving inventory management
While there are countless areas and aspects of the supply chain retailers can - and should - be fine-tuning in anticipation for peak months, there are few points better to start with than inventory. Organizations must prepare for the rush and optimize operations in a way that will translate to a smooth and seamless holiday season, with as few issues as possible. Below are a few ways to do that.
1. Use updated technology and systems
At this point, it is probably a bit too late in the year for you to adopt an entirely new inventory management system. Implementing innovative technologies into the supply chain takes careful consideration, timing and planning. Failing to properly prepare, train and test the solution can quickly lead to disruptions - which is the last thing you want to experience during the busiest time of the year. However, making sure any tools, technologies and processes you do already have in place are updated, secure and working efficiently is crucial. If the system is relatively new, verify that each and every worker is thoroughly trained and efficient in using it. The more detailed you are in doing this, the less likely you are to face an unexpected disruption.
It is also highly recommended that you have a backup and incident response plan in place. In the event that your current system suddenly shuts down, you'll want to have an alternate strategy to ensure you can still keep production flowing. Employees should also be aware of who will be responsible for what in the event of a disruption.
2. Consider seasonal hiring
One of your responsibilities as a manager is likely to uncover the best solutions for improving operational workflow while also staying within budget. And while reducing costs throughout the holiday season is surely just as big a focus for you as it is throughout the rest of the year, adding more holiday employees during this busy time is an idea worth considering. Whether it is to help sort and ship packages in inventory warehouses, work the floor at in-store locations or something else, it's important to make sure you have enough workers to cater to the wave of customers coming your way.
3. Stay organized
It sounds simple. But, as Sharma pointed out in his article, having to track inventory throughout disorganized warehouses is one of the biggest time-wasters for retailers, especially during the holiday season. To enhance your inventory management system, it is important to make sure you have an optimized picking process in place. The more organized, clean, clearly labeled and efficiently structured a warehouse is, the easier it is going to be for supply chain workers to fulfill orders, maintain proper stock levels and identify items as quickly as possible.
With the holidays just around the corner, there is no shortage of tasks to check off your list and operations to prepare for. However, the peak season is likely to go a lot smoother for retailers everywhere if they take the time to properly plan for it and prepare their supply chains in advance - starting with optimizing their inventory management systems.