Mastering peak season

The words ‘peak season’ can make a company take a deep gulp of breath – of excitement or of trepidation… and often both.

If you master peak season, you can reap great financial rewards that can see you through the quieter times. You can make loyal customers even happier and you can win new ones. On the other hand, if you get things wrong, you can really miss out on earnings, and by not shipping goods on time or running out of stock you can lose customers for good.

The good news is that peak season is something you can plan and prepare for.

Whether you carry out your own in-house fulfillment, or outsource this to a logistics company, let us share some insights to help you.

Planning for peak season involves forecasting demand which, by its very nature, is difficult and prone to inaccuracy. We have seen over the past few years that one year might look very different to the year before. There are many factors at play here.

There is currently an inflation crisis, which affects people’s spending habits in many countries. Of those that say they aim to save money, headline figures tell us that 67% will buy sale items, 48% will buy fewer items, and 47% will use more money-off coupons. (Source: ReadyCloud). Market studies like these can guide your marketing and promotional strategies and can also help you plan.

Another challenge is that it’s not only your company that’s going through peak season: all companies are going through it at the same time. There’s competition for everything: warehouse space, carrier capacity, warehousing staff and equipment. You need plan your capacity well from all angles.

Think ‘forecasting’ and not ‘hopecasting’. Simply put: avoid anything that’s just plain guesswork! It helps if you plan for at least three scenarios: 

Here are some considerations to help you plan your capacity accordingly:

• Review your stock levels well in advance. How long will stock last based on your different scenarios? Develop mitigation plans with your factories or suppliers in advance: What are your options to react if you see less or more demand? Consider increasing this as Cyber Monday/Christmas/Thanksgiving/back-to-school approaches.
  
• Monitor your inventory levels and set re-order points well in advance that are aligned with realistic order lead times.
• Do you need to increase your physical warehouse space?
• Do you have enough handling equipment like scanners, pack benches etc. available?
• Find out what capacity your carriers have and what their transit times are likely to be, taking into account the strikes and capacity issues many carriers have been experiencing.

Before and during peak season, monitor sales and adjust capacity in line with the scenario that is unfolding.

Your team:

• Do you need to increase your team? With permanent or temporary staff? There is a lot of competition for staff, so you will need to start early and reward fairly.
• How can you motivate your team? By increasing incentives? What else can you do to connect and engage your team? There are so many possibilities.
• How can can you train and upskill your team? Set-up a well-structured onboarding process with 360 degree gate reviews.
• What about your operations leader? Invest continuously to develop your leadership team. It will make a big difference.
• Think about mitigation actions in advance: How will you react if you see more or less demand? With which other operations can you share staff? Pooling staff will give you so much more flexibility.

Other crucial teams:

What about the teams at your logistics partner and at your carriers? Have this conversation early, ask them how they plan to staff up to cope with the increased volumes.

After all your hard work to plan and prepare, don’t then keep all this powerful information to yourself! Talk to your inventory manager, your warehouse staff, your buyers, your suppliers, your logistics provider, your carriers. And keep talking to them… ideally via a structured cadence and time blocked in your calendar (e.g. for the ‘peak task force’) so that you stay well connected during the time it matters most.  

Together you will be ready to respond to newly unfolding scenarios.

All our customers benefit from our Advanced Inventory Insights tool. It gives them detailed analytics on their stock levels and sales over time and by location.

“We designed the tool to have five key ‘action areas’, which allow customers to take the right actions based on their data,” says Simon Volkwein, DHL Fulfillment Network Head of Sales. “With the customizable filter function, they can follow the sales of individual SKUs by market, for example. And with our what-if scenario planning they can interrogate the data to discover what an increase in sales of x% in each SKU would require their stock levels to look like, by market.”

The DHL Fulfillment Network is a scalable option for customers as it allows them to increase and decrease their capacity in line with their sales.

Simon describes how proud DHL Supply Chain is of its Top Employer and Great Place to Work certification in many countries globally. “These accomplishments show how we look after our employees, and this helps us recruit and retain people, including temporary staff, in a difficult labor market.

“And on the matter of warehousing capacity, our customers tap into the whole DHL Supply Chain network, meaning they can rest assured that we will not run out of capacity for them.”

DHL’s connections with all key carriers ensure customers are well positioned for smooth fulfillment. “Use our network optimizer tool today to simulate how you can optimize your delivery times. Simon continues: “Once you share your order volumes per market, you will find out the best locations for your warehouses based on delivery speed, and estimated delivery times for your current and optimized network.”

Whatever your product, your company size, and your place on the fulfillment journey, with planning, preparation and communication you can master peak season, every time.

Take a deep breath of excitement!