The strong demand for domestic logistics through 2018 left shippers skeptical of the upcoming peak season. While UPS levied residential delivery surcharges for the 2018 peak season, neither UPS nor FedEx did so in 2019. However, general peak season surcharges appear to be more severe. The Loadstar notes that “UPS’ peak surcharge kicked in on October 1st, 2019, and remains in place until January 4th, 2020. A year ago, it was only in place between November 18th, 2018 and December 22nd, 2018, which means the peak season has been stretched from 5 to 14 weeks.” To keep peak season under control, supply chain leaders need to rethink why supply chain peak season planning has become a reactionary process, how optimization can help, and a few strategies to improve proactive planning.

Why Does Supply Chain
Peak Season Planning Seem Reactionary?

Supply chain peak season planning can feel like a process that begins at the dusk of summer and lasts through the new year. Across the country, retail businesses see a significant uptick of up to 70% in activity between Black Friday and New Year’s Eve. High-demand items for peak shopping season can have lead times over six months. With consumer shopping behaviors changing at an even faster pace, supply chains begin to exhibit reactionary characteristics. Supply chain leaders are focused on putting out the continuous fires, not necessarily planning. This is why despite all efforts to achieve advanced planning, supply chains still seem to experience growing pains through the holiday season.

Improved Management and Process Optimization Create Proactive Strategies

Efforts to improve management of the supply chain and optimize processes aid supply chains in developing proactive strategies for managing sudden changes in demand. The holiday shopping season will stretch the limits of capacity in your supply chain, and leaders and managers need better control over operations. Failure to capture a holistic view of the supply chain will result in data silos and a breakdown of essential communications and activities. More importantly, supply chains must take advantage of the latest technologies. While it may be too late to implement new platforms or solutions in advance of the 2019 holiday shopping season, it is time to start thinking about next year. Peak season planning must evolve from a seasonal process to a year-around activity. Only through continuous process optimization can supply chain leaders transform supply chain peak season planning from a reactive to proactive action.

How to Improve Supply
Chain Peak Season Planning

Finding successful ways to plan for supply chain peak season demand can be difficult. However, supply chain leaders that follow best practices can augment their 2019 supply chain peak season planning processes. As explained by Inbound Logistics, these include:

1. Coordinate demand forecasts with functional areas of the supply chain, including demands per region, mode, carrier, brick-and-mortar locations, e-commerce fulfillment centers, and more.
2. Implement flexible solutions for managing labor, inventory, and subcontracting.
3. Invest in better collaboration measures, including centralized communications, automated ordering management, self-reporting systems, and more.
4. Establish contingency plans to mitigate risks during weather events, demand surges, port closures, or other adverse events.
5. Collect data to understand consumer behaviors, which has a natural implication for improving inventory management.
6. Automate replenishment ordering and dock management activities to eliminate “out of stock” problems.

Choose the Right Supply Chain Systems Partner to Achieve Peak Season Success

Peak season can be a grand opportunity for supply chain leaders, but it provides the most benefit with proactive planning. Sometimes, customer trends and market forces will deviate from the expectations of warehouse leaders. A well-rounded, proactive strategy that focuses on connecting with customers and using data through the whole year will reduce reactivity during peak season. Connect with Veridian today by requesting a consultation to find out more.