There are eight shipping days remaining in your 2006 peak shipping season. A heavy winter ice storm is predicted in the vicinity of a primary shipping center in your network in the next 24 hours. Will enough staff be able to show up to meet shipping requirements for this DC? Will the carriers be able to meet the pick up schedule? If the carriers are late, what impact will it have on outbound staging? Should you consider transferring some of the shipping volume to another DC? If you do that, which orders should be moved, and how will that impact the service levels to all the orders in the queue?
Efficient, accurate operations during the peak season do not happen by accident. Peak season planning requires insight into current operations, looking for clues to where weaknesses will appear as volume and activity levels increase. Successful peak season planning means learning how to identify these small clues and planning how to keep the issues under control. This article will identify key areas and highlight considerations that will help provide insight into your peak season planning.
Inbound Operations
Inbound planning is the cornerstone for an effective and efficient peak season. Poor inbound planning can divert attention and resources needed for outbound operations once peak fulfillment begins. Some key considerations for inbound planning include:
1. Dock scheduling, cycle times, dock capacity—These three elements are closely tied to each other during peak inbound activities. A typical challenge is new items arriving for the peak season, such as holiday gift packs and new supplier shipments. Each type of new item brings its own data and receipt challenges. Make efforts to obtain accurate data about these new items prior to arrival at the dock. Don't let inbound plans be disrupted by slow cycle times related to data collection that can be done in advance of shipment arrival.
2. Reserve and Remote Storage— Peak season typically means larger inbound shipments, which typically result in high occupancy levels in reserve storage areas. Make an accurate assessment of how much capacity is required to support peak inbound loads. In today's offshore-supply environment this inventory sometimes sits longer before demand levels pick up. Should you consider offsite storage for overflow? If so, what is the appropriate material to move to remote storage? Slower moving existing stock or secondary inventory for the heaviest moving items? The time for these considerations is in the months leading up to the peak, not when you realize you're running out of space during the inventory build cycle.
3. Slotting Considerations—Equally important as capacity is where you place the reserve storage material. Develop a slotting plan to insure that the anticipated high volume items are located in the most accessible, least travel, least congested areas upon receipt. Don't get into a last minute putaway crunch storing items wherever some extra space exists. A bit more effort spent planning inbound slots will pay dividends when it comes time to access those same loads for replenishment during peak.
4. Promotions Planning—The best laid inbound plans can be wrecked if operations are not in sync with sales circulars and promotional events. Make sure that inbound operations is not the last to know when the most popular seasonal items are released for sale. Be proactive and insure that you have sufficient time to receive and putaway the featured items.
Systems Considerations
Supporting systems are another critical element not to be left out of peak season planning. This topic deserves its own article to cover all of the details but some of the critical elements for consideration should include:
5. Downtime Windows—Coordinate well in advance with IT staff to understand what downtime requirements will exist in the peak period and how they will be best scheduled to meet fulfillment commitments. Make sure that operations schedules, reporting and inventory data visibility assumptions consider system downtime windows.
6. Load Testing—Are the fulfillment and support systems (warehouse management systems, radio frequency, pickto-light, in-line scales and manifesting) prepared and capable of supporting the anticipated loads for the peak season? Communication and coordination with the support staff is critical to ensure that daily maintenance tasks and system tuning are in sync with production schedules and projected loads. If there are any questions about a subsystems ability to support peak levels, consider a simulated load testing prior to peak season.
7. Contingency plans for outages—What options exist if systems need to be brought down, or worse, go down unexpectedly? What scenarios and options are available for outages of 2 hours or less? How about six hours or more? Do you have the ability to move orders to other facilities for fulfillment? How much time within an outage would you have to make this decision? Which orders and how many orders could be transferred to other facilities?
Outbound Operations
The considerations for outbound peak planning should cover both expected and unexpected events. Some typical expected events to consider include:
8. Temporary Staffing—Before you begin the screening and hiring process this year look carefully back at the successes and downfalls from last year. Consider the impact that the temporary staffing had, both the good and bad elements. For example, would stepping up to higher experience levels and wage rates provide a better hedge against picking errors? Would you be better off maintaining the same skill level and moving temporary staff to other areas or invest more in the training and management of the temporary staff? The key to temporary staffing is to understand exactly what needs to be improved from the previous year and then identify the most cost effective means to prevent the problems from resurfacing.
9. Expedites—No matter how efficient fulfillment is there will always be more expedited order requests during peak. As such, it's essential to determine what increased levels of special handing can be supported without impacting other service levels. Establish, track and communicate expedite levels and capacities as early as possible. Create the concept of an order expedite budget with customer service. Without an effective level of prioritization, an operation could be overwhelmed with expedite requests if managers don't establish and enforce capacity limits. The time to do this is well before peak season arrives.
A few unexpected events you might want to consider:
10. Weather—What options are available if an early season ice storm prevents 30-50% of holiday staff from getting to the DC? Do managers have the information they need to determine when you should push demand to another DC? If pushing the demand to another DC is possible, how much can be transferred and what kind of orders should be held or transferred?
11. No Shows and Late Pickups Peak season is where carrier relationships can become critical. Companies must do what they can during the year to establish a solid working relationship with key carriers and discuss the options available to expedite an unscheduled pickup if another carrier drops the ball during the peak season. Traffic accidents, bad weather and road closures will all happen during the critical days of the peak season.
Peak season planning requires the ability to look at both the big picture as well as the detailed steps within your operations. It requires cooperation and coordination across individuals and teams. In the end, peak season performance is about three key elements:
- Planning. Try to anticipate as many dynamic elements as possible based upon past experience and projected activity. Carefully review key elements such as volume, timing, product mix and order mix against peak season strategies.
- Priority Management. No amount of planning is going to address every issue as the peak season arrives. The difference between successful and 'not so' successful performances is the ability to prioritize issues and focus limited resources where they can leverage the biggest results.
- Communication. The right hand must know what the left hand is doing at all times. Peak season is not the time to do things a second time or make extra work due to insufficient communication. Make sure that everyone understands that the increased level of activity requires an increased commitment to prompt and accurate communication at all levels.
These are some stepping stones for peak season planning. Hopefully, when the peak arrives, your operations will be sufficiently prepared to create an efficient and accurate fulfillment environment that will satisfy both customers and executive management, regardless of what the weather and other factors might arise.
Kevin J. Hume is Director, Consulting Services for EYNC, a consulting firm that specializes in strategic supply-chain and execution services based in Toledo, Ohio. He can be reached at [email protected]
