Holiday supply chain planning and preparations are well under way for anyone in the industry, and 2024 has brought an unique set of circumstances and challenges.
From port strikes to natural disasters impacting factories, it’s been quite a year for supply chain professionals – and the busiest season is still on the horizon.
Holiday supply chain strategy: Why preparation is a year-round effort
For many retailers and companies, after the holiday season is before the holiday season, because as soon as the ‘festival of love’ is over, planning for the next one begins with the big question: which products should be offered in the upcoming season?
For shoppers, buying items has never been easier. A few clicks of a button and viola! your item will arrive at your doorstep. However, the behind-the-scenes logistics of an order have never been more complex.Before an order goes out, the correct quantity of the respective product must be determined, as well as the supplier and the transport routes and companies. This is because some products – such as toys, electronics ,or clothing – have long procurement times due to their country of production or manufacturing, and they have to be dispatched in the summer so they’re on the shelves when holiday shopping begins.
Control delivery dates with backward planning: The key to on-time success
To avoid disappointed customers, they need a reliable indication of when their desired products will arrive, making backward planning essential to supply chain operations. This method mainly focuses on the planning of production and delivery processes, and is used to work backwards from the desired delivery date.
Capacity and detailed planning directly in the ERP system allows resources to be used more efficiently, bottlenecks to be identified, and idle times to be minimized. It also improves capacity planning and maximizes throughput.
Another advantage of backward planning is the ability of a company to react quickly to possible changes in demand or production conditions, especially in dynamic markets where the ability to adapt quickly is crucial.
Scale up for the holiday rush: How to expand capacity and manage demand
In addition to backward planning, retailers and companies should also plan their storage capacities for product procurement, because at no other time of the year are as many goods ordered as during the Christmas and holiday period.
According to the US Chamber of Commerce, November and December are the busiest shopping months of the year. They predict holiday sales in the US will reach record levels, exceeding $957 billion.
To meet this demand, companies need to expand their storage capacity accordingly for the holiday season.
But it’s not just storage space that can lead to bottlenecks. The volume of parcels often increases many times over during the holidays – particularly in online retail and for logistics providers – which often pushes logistics providers to their limits. Therefore it’s important to optimize freight, fleet and logistics management at an early stage to increase efficiency and improve agility, thereby establishing a sustainable, competitive, and risk-resilient supply chain.
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Achieve full supply chain transparency: Optimize holiday operations with real-time data
To ensure customer satisfaction during the Christmas period, it’s crucial for companies to know at an early stage whether a product can be completed and delivered on time. Transparency along the entire supply chain therefore plays a crucial role here.
With a real-time supply chain network, companies can monitor and optimize every phase of production, identifying and avoiding delays. In addition, information about the materials used can be exchanged and synchronized along the entire supply chain – from raw material to delivery. This ensures product quality, minimizes inefficient processes, and prevents product recalls.
Even though the holiday supply chain is a year-round topic for supply chain managers, everything should be geared toward the holidays by the beginning of fall.
Early planning for the procurement, storage, and distribution of holiday items is crucial to avoid empty shelves. Companies need to optimize their processes and work closely with their suppliers, while also taking unforeseen events such as strikes into account.
If planning is too late, companies risk unsatisfactory holiday sales. With timely planning and modern technologies such as AI, companies can ensure a smooth shopping experience and a successful holiday season.
