The end of the year can bring challenges to supply chains, and not just because of the weather. Procurement management may face crunches as the standard amount of demand increases. It can be a difficult time to try something new, given the high stakes, but it can also be a learning process where businesses see just how effective their supply chain organization is.
While companies can try to unify the different systems they rely on, the end result can also depend upon managing each individual piece successfully. Let's take a look at the different areas that will feel the pressure when the holidays arise.
#1: Retail
Changes in front of the counter can still affect business strength as consumers react. In January, the National Retail Federation stated that the 2015 holiday season saw sales revenue exceed $626.1 billion. The organization's CEO and president, Matthew Shay, described some of the problems that businesses had to face to guarantee productivity.
"Make no mistake about it, this was a tough holiday season for the industry," Shay said. "Weather, inventory challenges, advances in consumer technology and the deep discounts that started earlier in the season and that have carried into January presented stiff headwinds as retailers competed with one another and their own bottom line."
Businesses and consumers alike also had to contend with the rise of chip-based credit cards and the tools needed to scan them. A year later, the change has led to more use even as the technology still causes functionality and cost concerns. Computer World said that this system may have reduced fraud costs, according to Visa, even as businesses question its effectiveness.
#2: Managed IT services and data
Analytics and other data-influenced technologies could inform logistics planning in a significant way. With smart, responsive efforts, businesses could shift their traditional strategies to be more agile. Supply & Demand Chain Executive mentioned this in a long list of ways that supply chains are evolving before the holiday season.
Some of the methods the source pointed out included utilizing performance metrics, predictive measurements and using cloud-based software to provide visibility for the important supply process. The article also said that the previous methods have left data siloed calling for more integration along the entire chain.
By thinking intelligently, businesses can also choose channels to match the business demand and needs. With product lifecycle management, there may be a clearer link between products and supply efforts.
"By thinking intelligently, businesses can match demand with needs."
#3: Shipments
There's also the sheer amount of products being moved to take into account. A separate, more recent NRF press release used a Global Port Tracker report to look at the trends affecting supply shipments this holiday season.
The level imports is expected to increase this year, continuing an upward trend in the number of Twenty-Foot Equivalent Units over the past few years.
This December, the number is predicted to reach 1.54 million TEUs, as well as an 18.6 million TEU increase for the total cargo volume this year. According to the source, this figure has increased since 2010 after rebounding from a major drop in 2009.
E-sourcing and other strategic measures will give businesses some important means of oversight to prepare for any hectic season, especially the holidays.
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