As a supply chain professional, you’ve probably read numerous articles regarding peak season in the past few weeks. Due to the nature of my profession and network, I’ve also seen and had multiple discussions around peak season planning.
“Success is a Numbers Game”
You’ve heard this before, and preparing for peak season is not an exception. Here are some interesting peak season statistics that may capture your interest:
- According to National Retail Foundation, holiday sales for 2017 are expected to increase by between 3.6 – 4% over 2016
- There was a 12.6% increase on non-store sales over 2015
- 29% of sales on Cyber Monday came from phones (up 27% from 2015)
- 39% of consumers use Buy Online Pick-Up In-Store (BOPUS) to avoid expedited/regular shipping charges
- According to Visa, total holiday retail spending in 2016 increased from 3.8% to 4.8% over 2015
All these numbers point to one thing: increase in projected sales for 2017 peak season. Although this is exciting news for any retail businesses/eCommerce, it’s also an extremely chaotic and stressful season that requires extensive planning.
In order to meet the demand, you not only need the inventory, but you need the capacity to process the inventory: Labor.
“The best time to plant an oak tree was twenty years ago. The second best time is now.”
Yes – the quote is referring to your labor preparation. Given that it’s already November, hopefully you’ve begun your staff planning for the peak season. However, if you’ve just begun, or are currently in the process, here are some things that you should consider:
I will start with something that’s not mentioned very frequently in many articles I see: system tuning. There are many moving parts when it comes to receiving a product to shipping it out, and the associates rely heavily on the systems to tell them exactly how to handle each product. Rather than leaning on the associate’s experiences and discretion, you want to ensure that every associate can handle each product without any room for error.
This season is also a very important time of the year to tighten up on your labor productivity. If you were able to increase the productivity by 20% with your current number of associates, imagine the magnitude of impact when the number of associates on the floor is increased by 25% during this time. Rather than thinking that it’s not feasible to keep the temps accountable, make every effort to tighten up and increase their productivity!
Update SOPs and Training Documents
Take a look at your SOPs and training documents that may have not been updated for a while now. Throughout the year, different trainers have taught new associates with different methods of completing each task. It may have gotten the product in and out of the warehouse with the help of personal guidance, but that will be impractical when you have hundreds and thousands of temp associates starting at the same time. So ensure that the materials are up-to-date, and provide sufficient level of training prior to their first day on the floor.
It’s going to be a bumpy ride for the next few weeks, and it’ll be hard to predict the exact needs in each area; thus, adaptability and flexibility will be the key success factors to your peak season. With such substantial increase in volume, unexpected bottlenecks can cause major downtime in the overall operations. Therefore, it’ll be valuable to cross-train your workers to operate in more than one area of the warehouse.
Make Tools and Help Available
For any associates that are new to the warehouse, whether temp or FT, one-time training is not enough. Unless the steps are practiced repeatedly, they’ll continue to seek for help throughout the peak season. Rather than reacting to the needs, you should prevent the chaos by making tools and helpers available throughout the warehouse. Staffing one additional supervisor per area to make the operations smoother will be a worthy investment.
Consider Temporary Incentive Plan
Incentive programs— with awards in the form of money or tangible awards—increase performance by an average of 22 percent (Stolovich 2010). This also applies to warehouse settings regardless of their employment statuses (FT vs Temp). Awards can range from a simple t-shirt to performance-based pay, but giving them the motivation to excel will show a significant result when implemented correctly. Here are some areas where you can utilize incentive to better prepare for peak season:
- Willingness to Cross-train
“Buy before you try it”
Said no one, ever. So why should you? Most stores allow you to try the product before committing to buy, and you can even return them after the purchase. We also do this with our employees through the concept of internships. We carefully evaluate them as an asset to the company, then make the decision to extend a full-time position.
Peak season is also an opportunity to hire outstanding temp employees while motivating the existing, FT under-performers. However, in order to accomplish this, you must ensure that your LMS is working accurately before the season starts.
Peak season, when prepared and executed properly, is not just a season to survive, but an opportunity to thrive and transform your workforce!
Contributor: Jimmy Kwon, Supply Chain Leader at Bricz