How your supply chain can accommodate the festive season rush: Santa’s gifting you logistics solutions this year

Deck the halls with gifts and turkeys! It’s that time of the year again when retailers get a whole lot richer, and customers get a whole lot satisfied. The festive season has always been joyous and celebratory, if you don’t run a store, that is.

With Thanksgiving, Black Friday, Christmas, and New Year lined up back-to-back, it feels like it’s impossible to cater to the masses. The whole year retailers wait around for customers, and once they show up, the stock’s almost out. An inefficient supply chain is like carving chicken on Thanksgiving, the stampedes on Black Friday, the Grinch stealing Christmas, and the ball not dropping on New Year’s; it’s everything that’s wrong with the holidays. 

The festive season no matter how bright and shiny on the outside, brings with it, challenges of its own. Sure, it’s great for business, but the happiest time of the year for others is the toughest time for retailers. With massive volume requirements, longer lead times, inadequate capacity planning, and shortage in employees, retailers find themselves with a surge in demand and customer expectations, that they simply aren’t equipped to handle. On the flip side, if they do somehow manage to procure a large number of products for sales, they’re more often than not left with excess stocks, due to the overestimation of inventory needs. 

How to overcome festive logistics challenges?

No, we’re not talking about how to get a Christmas bonus to buy your wife those diamond earrings. We’re talking about the hard-hitting challenges- adhering to SLAs, ensuring on-time supply of required products, managing employee absenteeism, etc. Here’s how you can overcome these challenges to maximize the season’s greetings –

1. Demand Forecasting

The demand surges are impossible to predict during the holiday season, because of the sheer temperamental attitude of customers at the time. With demand forecasting softwares available, the efforts of retailers are cut to minimal. The auto-generated results of demand requirements can be altered according to external factors and management expertise, as well, to paint a more accurate picture. 

2. Inventory Management

Once the demand estimates are in, the retailer can go ahead with stocking up on the required products. Due to varying lead times owing to the nature of the product, the retailer must order on the basis of how long product delivery would take. Products like toys have longer lead times than products like chocolates. However, considering that the festive season witnesses an inexplicable rise in demand, once a schedule is created, products should be ordered well in advance in order to ensure their availability on the days leading up to the holidays.

3. Shortage of Workforce

The holiday season ensures the reunion of dysfunctional families and otherwise. So there’s no stopping employees when they want to take a couple of days off work. Except, with increased demand comes an increased need for a larger workforce to cater to those needs. If you force your employees to work holidays, everyone suffers the backlash. So how can you motivate your employees to work on the busiest days of the year? Simple. Pay overtime or offer them floating holidays, anything to make them voluntarily come into work. You can also rotate employees on shifts so that they have their fair share of time to spend with their families. Santa’s little helpers were never forced into a sweatshop set-up to slog on the holidays, so keep in mind happy workers are efficient workers.

4. SLA Adherence

With lots of traveling and gift deadlines to keep up during the holidays, when a customer orders a gift, there can be no margin for late delivery. Making deliveries on time should be the least of your worries with AI-backed technology that has come about over the past decade. Dynamic routing platforms like Locus, intelligently plan delivery routes by factoring in operational constraints and environmental factors like real-time traffic, to ensure the delivery of packages at its promised time slot. The problem of ambiguous addresses has also stalled the delivery duration, but modern-day companies even provide solutions to simplify and convert such addresses into exact geographic coordinates.

5. Weather Constraints

Walking in a winter wonderland may be delightful, but delivering in knee-deep snow, not so much. With frightful weather around the corner, employee safety is crucial. Using allocation engines can give an automated recommendation of the best-suited vehicle based on weather constraints, shipment volume, shipment type, vehicle type, stop durations, and delivery timings, taking into consideration real-time climatic conditions.

6. Inventory Shortage 

When a promising product is low on the supply side or is tough to procure, the retailer can adopt a trick that boosts sales both during and after the holiday season. Let’s say a particular toy is scarce in the market, but your demand forecasting tells you it can easily sell out once you have it. The problem is that your supplier can only deliver a limited stock during the holiday season and the rest after. The trick here is to advertise the toy so much that every child within your marketing reach wants it. They will continuously insist on getting it, to a point where their parents promise to gift it on Christmas.

Once the parents realize the toy is out of stock, they buy a couple of other toys to make up for the one that was promised. Which acts as a temporary pacifier. Since they promised to buy it, after the holiday season once the toy is back in stock, they end up buying the originally promised toy as well. 

This holiday season Santa’s climbing down your chimney to leave you the perfect gift for all your problems – Locus.  Locus is a global decision- making platform in the supply chain that uses deep learning and proprietary algorithms to provide route optimization, real-time tracking, insights, and analytics, beat optimization, efficient warehouse management and vehicle allocation & utilization.

Locus Dispatcher provides automated route planning that considers multiple real-life constraints and distribution models using Locus’s deep machine learning engine. It can be used for intelligent services scheduling to optimize the on-ground field resources, thus making it easier on your business resources.

Major challenges like demand forecasting and inventory management can be solved by the Locus’ Supply chain consulting team who are well-equipped with the expertise to study historical data to take effective actions for the future. So, this festive season, with the help of Locus, jingle all the way to your customer’s home with logistics solutions that can make your supply chain more functional during the busiest days of the year.

Read more about how businesses can manage peak delivery periods?

This post was authored by: Riya Raju