How can supply chain professionals identify and address costly inefficiencies before they happen?
Last year, US shoppers spent a record $126 billion holiday shopping online — a 19.1% increase over 2017. The rise in e-commerce during the holidays stretches distribution centers and their employees to the limits. With the 2019 holidays just around the corner and online spending expected to rise once more, how can supply chain professionals identify and address costly inefficiencies before they happen?
Here are 5 tips for how to prepare for the 2019 holiday season:
- Build and maintain your teams
One of the greatest challenges of the holiday season is finding and retaining quality employees. Understaffed or improperly trained teams can slow distribution and have a negative effect on your bottom line, so be sure to assess your needs and start your recruiting efforts early. Utilizing multiple temp hiring services, attending job fairs, and advertising seasonal positions are important when building teams for peak times.
Turnover is often a function of training, culture, pay, and management skill. No one likes to admit to the latter, but people are generally loyal to managers more than businesses. Consider incorporating more schedule flexibility, bonuses, and implementing better onboarding and training (of both workers AND managers), as well as providing visibility into potential career paths; all are factors that will help improve retention and avoid unexpected personnel changes during seasonal peaks.
- Review your layout and create high-velocity pick-zones
Before the first holiday orders come in, take some time to walk through your facility to make sure each department is organized and configured to handle the incoming surge, keeping product demand, foot traffic patterns, and storage capabilities in mind. Relocating slow-moving products to 3PL or temporary storage containers is a great way to free up space and optimize the picking process in peak seasons. Placing high-demand products in specific zones increases speed and efficiency while reducing the risk of bottlenecks.
- Reduce cost per pick and worker fatigue by going mobile
It’s easy to underestimate how much time and energy is spent walking back and forth to printers, computers and other equipment. Twenty seconds here, 10 seconds there; it’s a costly practice that adds up $4.3 billion or 256 million hours of labor annually, according to the US Census Bureau.
Converting a stationary workplace into a mobile one is the easiest, most economical way to combat worker fatigue and improve efficiency. Implementing a mobile picking station that allows workers to pick, scan and track in one place can increase picking rates by 30% while decreasing overtime by 75%.
- Embrace dimensioning technology
Accuracy is the key to the survival during the holidays. To keep up with high customer demand, many facilities across the country are implementing dimensioning technology to capture data and proportions of products so shipping costs can be predicted more accurately.
A proper dimensioning system will scan a parcel in under a second, identify best packaging solutions, and enable direct-to-box picking, reducing pick times by 10%. For a company that ships 100 packages a day with an average cost of goods sold (COGS) of $15/parcel, that would increase revenues by $150 a day, or roughly $37,500 a year, according to data by QubeVu. Warehouses using automatically generated images on pick lists reported an error reduction from 4% to less than 1%.
- Talk to your partners
One of the biggest side effects of online shopping is that more items than ever are being shipped by small parcel companies. As such, you want to reach out to your partners and work with them to ensure that they are prepared to handle the rush as well. Now is the time to communicate with your partners about their needs and what you can do to make everything run more smoothly, even if it requires more effort on your end. The bottom line is that you want to minimize delays and keep your customers happy. Think of it as an investment in your potential holiday earnings.
While we are still a few of months away from the holiday rush, it is never too early to develop a plan of action and get your company ready for success. Go into each season with the idea that you will improve from the year before. This will empower you to succeed more than you thought possible and will keep your company on top.
This article first appeared on www.parcelindustry.com.