When most of us think about the holidays our minds are full of family, food and gift giving. We take the time to be thankful for the bounty and the way the holidays bring us together. Those of us connected to the supply chain world think about those things too, but never lose sight of the supply chain’s role in making the magic happen! Each link on the chain has its own challenges to face and they have succeeded year after year in overcoming them.
Retailers start thinking about the holidays in January. They access what inventory remains and start planning for the year ahead. Certain items are rather easy to determine what to order for the next year. For example, grocery stores can look at there year after year data when deciding how many turkeys they need for next season. Predicting which toy will be flying off the shelf or what product will be the next trendy have to have item is much more difficult. Once a retailer decides what they will need they must weigh different lead times for products, transport and storage. This would all be enough of a challenge but then they must factor in that holiday shopping starts earlier every year so they must be prepared to keep the shelves stocked for the whole season!
Once the orders are placed the and the products are created its time for the transport. Christmas starts in August for the shipping companies. The challenge is to get all the products here on time for the original orders as new orders are coming every day. They must balance the room they have on every ship with everyday needs and increased orders. Every order must be accurate as there is not a quick fix if something goes wrong. As the holiday gets closer urgency increases. Shipping companies also must consider holiday closures and delays in incremental weather.
Airfreight faces many of the same issues the shipping industry does. Each cargo plane has the same amount of space it did during the regular season, so managing cargo placement in every flight is crucial. Cargo planes share the sky’s with increased commercial flights, so the FAA also has an increased workload. They have extra costs to pay for increased labor and additional terminal fees for the longer parking time needed to unload higher volumes of cargo. This is the preferred method of rush orders, so the pressure is on!
Warehouses also start preparing for the holiday season in August. They balance the inventory they hold all year long with incoming and outgoing holiday freight. Storage capacity and pack station space are the main challenges. The trick is to manage a 40% increase to the inventory without displacing the year-round inventory. In addition to extra staff there is also the resources they need such as scanners or carts. They have same pack station space to work with to process all the additional inventory, so the key is to get creative about rearranging their pack stations, creating assembly lines and prioritizing what needs to be done first.
The trucking industry moves 70.7% of the nation’s freight by weight, the holiday season is no exception. Retailers are easily able to add additional help or increase hours during the holidays, this is not the case for the trucking industry. The loads increase without an increase to trained, CDL licensed drivers. Due to safety regulations the existing work force can not work extra hours each day but can work additional days. Drivers are more than willing to work the OT, but there is still of a max to hours in a 7-day work week. Those safety regulations are crucial especially when holiday traffic and aggressive drivers have increased. If stores are still taking delivers until Christmas eve many drivers will not make it home to their families for Christmas.
Everyone in the supply chain is more than happy to do the work, no one is complaining about this profitable time period. The Supply chain is the ultimate secret Santa! The holidays are a time to be thankful to all the service members, fire fighters, police officers and hospital staffs who keep working while we celebrate. This year let’s take just a minute to thank those who put turkeys on the tables and presents under the tree!