With the holiday season right around the corner, if you haven’t yet prepared for the ramp-up in business, now is the time. Some companies do up to 50% of their business in the last quarter of the year. If yours is a seasonal business with year-end increases, your warehouse needs to be in tip-top shape to accommodate the surge.
There are many things to take care of on an ongoing basis in any warehouse, but a few are even more critical during the busy holiday season:
1. Warehouse Layout
Conduct a layout review for each area in your warehouse. Ensure that receiving, inventory and shipping are all ready for the increase in traffic. Do you have enough space to accommodate much more product arriving at your warehouse? Focus on improving organization, flow, storage capacity and space utilization at this stage so you’re not left scrambling once the trucks start rolling in.
2. Warehouse Space Requirements
Holiday-heavy businesses often see dramatic inventory increases of 40% or more, and even though inventory turns should be much higher than the rest of the year, product often arrives weeks or months before it will sell. You need to take your specific warehouse into consideration. For example, many warehouses are set up with all beam spacings the same, which results in shorter pallets leaving lots of open space above them. Think about that and ask yourself these vital questions:
- Was any additional temporary storage required last year (nearby “overflow” warehouse, trailers spotted on the yard or at the docks)?
- Have you made similar arrangements for this holiday?
- Have you performed pallet consolidation to free up additional rack positions?
- Do pallet rack locations vary in size (distance between beams) to best match the height of the arriving pallets?
- Are all your primary locations filled to max?
- Are there opportunities to add additional pallet racking in the building? Above the dock doors? Above flow rack?
3. Warehouse Order Projections
Many holiday-heavy businesses receive as many as 50% of their orders in the fourth quarter of the year, and most being in the last 30 days of the year. Do you have a good idea of what to expect from past years’ sales reports? Can you project down to the daily level and determine how much product you need to move? Do you have the latest order flow projections from the sales and marketing group? There are a number of software packages that you can use to manage your inventory flow on an ongoing basis, but be careful in introducing a new system too late in the year.
4. Warehouse Staffing
Once you have your volume projections, you will need to staff up to meet the demand. Have you calculated your staffing needs by day to meet your service level goals (orders/boxes per hour per employee, lines picked per hour per picker, etc.)? Make sure to get HR onboard with your needs. Once you understand your staffing needs, also consider:
- Are you offering a “stay on” bonus to the seasonal workers?
- Have you contracted with a staffing agency to provide backfill if you need it?
- What is your staffing strategy if orders are significantly greater or less than planned?
Many companies have a well-defined time-off policy during peak seasons to make sure there are enough workers there to handle the load every single day.
5. Warehouse Maintenance
Your ability to adequately handle a surge in business is dependent upon your equipment working properly. Making sure you have maintained all your material handling equipment before you hit your surge is vital to a successful holiday season.
Check and double-check:
- Lift equipment
- Power conveyors
- PLC systems
- Backup power supply (generator)
- Order printers
- Company vehicles.
If you use software, are your software vendors aware of your seasonal peak and do they have 24/7 support for you? If you are located in an area with winter weather, have you made arrangements for snow removal?
There is a lot to do to prepare your warehouse for the holidays. Following these tips should help get you positioned for a successful season. And after the holiday rush is over, make note of what you did and what you learned so you can make the process easier next year.
Jeff Howard is a vice president with Advance Storage Products, a structural rack systems manufacturer, with over 15 years of experience in the material handling industry.