Supply Chain Enabled

Preparing your supply chain for the holiday season

Published: September 22, 2023
Author: Keelin Rowan

It’s that time of year, again.  Those of us working in supply chain have gone through the holiday season planning process many, many times, but it never hurts to stop and think about how we prepare for what is often the biggest seasonal impact to our business’ bottom line. 

The big question for the whole business is whether they have everything they need to meet the forecast for the season.  Your sales and marketing team have their seasonal plans in place, with customer satisfaction and on-time delivery metrics on their lips.   The eCommerce store is ready with seasonal design, promotions, personalisation, and gifting. Your digital marketing team are focussed on seasonal content, promotions, CX and UX.  Your B2B customers have already explained their needs (and hopefully many have placed their advanced orders!). 

Now it’s left down to the supply chain team to ‘make it happen’.  The challenges for supply chain can be many, but some of the biggest at this time include;

  • Are my stock levels sufficient to meet this increase in demand?
  • Is my supply base ready?
  • Do I have capacity plans in place for resources, warehouse space, and logistics?
  • Where do I need to build some contingency?

Many businesses already have their plans in place and are in execution mode, while others are looking at this for the first time.  So, what should I be doing?

Seasonal Inventory

Seasonal inventory can be very unpredictable.  You have the forecast, but you recognise that sales forecasts, while developed based on historical purchasing behaviours, are not always accurate.  You need to ensure that your stock levels allow for the expected peaks in demand while being conscious of the level of working capital tied up in stock.  In addition, managing that stock level to ensure you are not left in an overstock position post-season is important.  You will need to set your stock reorder points carefully, bearing in mind any fluctuations in expected demand.  The safety stock you are holding or planning to hold and the volume you are reordering can vary substantially with seasonal variations.

When planning your stock levels, do not overlook your needs for seasonal changes.  Do you have labelling changes for the season?  Have bundles been offered on your website that require a change to your bill of materials?  Are new products being released this season?  Are there gifting solutions that need to be put in place?  Some of these changes, in isolation, might seem small, but if overlooked, they can have a considerable impact.

Supply-base readiness

The readiness of your supply base can make or break your season.  Those of you with an effective supply base structure in place can leverage your ongoing relationships to ensure the availability of the product you require to meet seasonal requirements.  Your suppliers, however, are reliant on insights into your plans for the season in order to be able to support you.  Sharing your forecast early will help enable their preparedness.  From there, they can consider their production plans, raw material and component needs, and capacity plans. In turn, they can work with you to mitigate any foreseen constraints, lead time consequences, cost implications, and all other factors that could create challenges for the season.

Visibility to your real-time stock levels

Real-time stock level visibility is highly desirable at all times, but in particular through a busy season.  If you are restricted in having real-time visibility, ensuring you have a robust safety stock policy will mitigate some of that gap.  Stock levels are influenced by fluctuations in demand, but also changes to supply lead times, so being able to monitor the ongoing position of your stock and react in time to continue to meet your customers’ demand is critical.  Indeed, remaining aligned to promotions and events will help you to identify mini peaks as they happen and respond accordingly, if necessary.

The other benefit of visibility through this period is to mitigate against being overstocked at the end of the season, by being in a position to react appropriately when it appears some products are not moving as expected.  Timely decisions regarding a pricing mark-down, or alternative promotion for sell-through will help to alleviate the impact on stock levels. 

Warehouse space

Warehouse space is currently at a premium.  Ensuring the right space availability in your warehouse to meet the season’s demands is essential. 

Now is the time to review your non-moving or slow-moving stock to release that space needed for incoming and fast moving product, so as to maximise your position for the season ahead.  Whether you have outsourced your warehousing to a third party, or indeed are managing this internally, it is always prudent to complete a full review of your stock holding well in advance of the holiday season. 

Perhaps there are options to starting the season early.  Do you provide the option for your customers to place advance orders?  For some in the B2B retail business, advance orders are a normal phenomenon. If your business is set up for this, consider fulfilling as many of those as possible before the peak hits. Having the ability to rely on your incoming supply and warehouse capacity is paramount to success. Shipping ahead of the peak where possible, however, can make a substantial difference to your capacity plans.

Your team is the key

Your team will be the difference between a successful or a challenging holiday season.  Putting all the necessary supports in place and clearing any obstacles provides the best environment to support your team to achieve what is required.   

Resourcing the holiday season can often mean needing to flex your team, but how you do that needs thought.  Do you have a staff plan for the season ahead?  Are arrangements in place with an agency who can be relied upon to provide you with the support you need?

Perhaps you can leverage resources from elsewhere in the business?  While this is not always a practical option, it shouldn’t be overlooked.  Granted, it will be a solution that you will need to develop over time in order to have a reliable source of additional staff for these periods.  Such an approach requires careful planning and cross-training, but in the long run can provide a great alternative to relying on external assistance.

Holiday season preparation requires numerous factors to be considered, from the setup of your warehouse, planning for high volume seasonal returns, aligning with your third party providers, planning for your transportation peaks, and a whole lot more. 

If you are having challenges, or your season has historically not been as successful as it might, reach out for a chat.  We are happy to support you in overcoming these challenges and getting the most out of this season!

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