6 Ways To Prepare For Seasonal Supply Chain Fluctuations
The fall surge is upon us, and food and beverage companies should be looking closely at inventories to prepare. Because forecasting can sweeten profits or devour them, accuracy is key. Stocking too much butter and cream means write-offs, while shortages can send business to rival brands—and not just for today. If a customer decides that your competitor’s lower quality, lower cost berries don’t make a discernible difference in their baked goods, you may lose a customer for good.
Scrutinize these six key areas to make your fall surge, or any other seasonal surge, a success:
1. Data. Using Sales and Operation Planning (S&OP) practices can help assess your ability to meet inventory demand fluctuations. It is also essential to analyze data from past seasons, looking for trends in data by breaking down averages into smaller increments and paying close attention to seasonal spikes. In the case of perishables, you must also factor in expiration dates, shelf life, and waste (THOMASNET.com).
2. Profits. Concentrate forecasting and tracking efforts on the key items from which you reap your largest profits. Usually 80 percent of your business comes from 20 percent of your inventory. Fine tuning efforts there will yield greater returns than trying to manage every item with pinpoint accuracy (WDS).
3. People. Now is the time to communicate with staff and prepare them to manage fluctuations. Temporary staff should come on board now and start training. Offer existing employees refresher training, and consider cross-training employees from less time-sensitive areas to pitch in during demand spikes and bottlenecks. If your packaging staff is going about business as usual while the fulfillment team is scrambling under pressure, your operations will fall out of balance. Better to put experts in critical, decision-making roles and have less experienced or temporary staff support them with less complex jobs (Ryder).
4. Suppliers. Low-cost sourcing models that rely on offshore producers typically require a longer lead time (Gartner). During seasonal fluctuations, adding short-term vendors with close proximity gives you the ability to fill last-minute orders and ensure Just-in-Time (JIT) or production shipments flow seamlessly. The extra cost will offset the losses you would sustain from shortages. Better to reduce your margins to maintain a profitable customer. Chalk up losses to experience and apply the lessons to next year’s forecast.
5. Automation. Manual processes are cumbersome and create opportunities for human error. Automated processes and tools like electronic data interchange (EDI) and bar code scanning can help you track best-selling items more closely and in real time, and reduce the mistakes that inevitably occur with manual counts and spreadsheets. Also, consider inventory management software or a low-cost accounting program with a central database to store and update data (WDS). To ensure a well-oiled automation machine across the board, hold your suppliers and transportation providers to the same standards you hold your own company to.
6. Truckload Procurement. When product demand is high, the capacity market is tight. Taking a strategic approach to truckload procurement by planning ahead, being flexible with scheduling and mode selection, and focusing on nurturing relationships with your carriers can help you get better access to reliable capacity regardless of market conditions. Check out our previous blog post on ensuring capacity during a surge, for more tips on sourcing carriers during a busy season.
We understands the pressure of shipping during seasonal spikes in demand, as well as the total delivered cost of not meeting that demand. If something goes wrong, it could result in potentially losing a customer or sacrificing valuable product placement. From drop trailer programming to expedited freight, we create custom, time-sensitive, and reliable solutions that keep your freight moving seamlessly and your customers happy.
Contact us to find out how we can help you through your busy fall season.