For Retailers, This Holiday Season is All About Survival. Here Are a Few Tips to Help.
If you haven’t started preparing for the 2021 holiday season — whether you’re a shipper, carrier or even a shopper looking to place a few gifts in the hands of loved ones — you’re already behind.
Major retailers have already started staffing up to the extent to which they can, with a big emphasis on transportation, supply chain and distribution. For example, Walmart in August started a push to hire 20,000 seasonal workers devoted to supply chain and transportation (that’s in addition to the tens of thousands of seasonal workers it adds annually to work inside its stores). Dollar General will continue with its hiring efforts after adding 50,000 new employees since mid-July, and is offering a $5,000 sign-on bonus for truck drivers joining their private fleet. The U.S. Postal Service is planning to hire more than 40,000 workers this holiday season. There are plenty more examples to point to, but I’m sure you get the idea.
Now is the time to start planning and preparing your distribution network for the holiday shipping rush. Last year was tight, but this year the shipping crunch will leave many out in the cold. Products simply won’t get to market, retailers’ shelves will be empty and, sadly, many won’t have the gifts they’re hoping to give (or receive) this holiday season.
For those striving to survive in this looming supply chain chaos, here are a few tips to help:
1. Start early.
Peak shipping season in North America usually starts ramping up in September in preparation for Halloween — the second largest holiday for consumer spending — and continues through the first of the new year.
Wise retailers and distributors should think of that September and early October ramp-up as the beginning of the holiday shopping season. Your products simply will need more time to get to market, and the timelines you’ve operated on in the past will no longer be adequate.
How do you anticipate your customers buying your products? Where does your inventory need to be to position your business for success? What can you do right now to start making it happen? Those are the questions you and your team need to answer sooner rather than later.
2. Remain flexible and agile.
For the COVID-era supply chain, it’s all about flexibility and agility. Have a plan and try to make it work. But also have a backup plan, and a plan C. You might even need plans D-J. Expect uncertainty and be prepared to initiate those backup plans should the need arise.
Bad weather, understaffed ports, cargo ships from Asia sitting off the coast of Los Angeles for two weeks longer than anticipated, your carrier not having enough drivers to deliver your freight on time ... these are all realities in today’s world. Know they exist and be prepared to manage them and adjust course when they inevitably hit.
3. Utilize automation where possible.
Skilled workers are hard to come by in today’s world. Job seekers are often hesitant to return to work, and they have countless choices when they do start job hunting.
To offset the labor shortage, implement automation where it fits within your distribution and fulfillment operations. Planning for 2022 should start now. Warehouses should move away from expensive, fixed solutions of the past and toward flexible, modular automation available in today’s robotics systems. For medium- and high-throughput SKUs, traditional storage should be replaced with batch picking mini-load automated storage and retrieval systems or shuttle systems paired with each sortation solution. These robotics systems will reduce operating costs, increase flexibility, and allow for scalability as your needs evolve.
4. Establish realistic expectations.
Lastly — and maybe most importantly — communicate, communicate, communicate.
Communicate with your customers. Make sure their expectations are in line with what your capabilities are so they’re not anticipating something you can’t deliver.
Communicate with your providers. Understand when needs will and won’t be met, and make plans accordingly so you can find alternatives or communicate to your customers as early as possible.
After you’re done communicating with parties on both ends, do your best to honor those commitments. Overcommunication is your best bet.
By following the suggestions above, you can overcome supply chain obstacles and exceed customer expectations this holiday season.
Denny McKnight is the president and CEO of Tompkins Solutions, a leader in supply chain consulting, technology and implementation.
Denny McKnight is president and co-CEO of Tompkins Solutions. Tompkins Solutions, a subsidiary of Tompkins International, is a global supply chain services firm dedicated to helping clients achieve supply chain excellence and profitable growth. Founded in 1975, Tompkins has integrated its decades of experience in strategy, commerce, logistics and technology to provide unique supply chain consulting and material handling integration solutions. By combining best-in-breed services and technologies, Tompkins delivers a true end-to-end supply chain solution, enabling clients to improve the customer experience and ensure long-term success. Tompkins is headquartered in Raleigh, North Carolina and has offices throughout North America. For more information, please visit www.tompkinsinc.com.