You don’t need to go far to hear the murmurs of Christmas talk. Although many are not prepared to adorn their Christmas hats just yet, the preparations for the festive season are well underway in both the homes and businesses in the UK (even if everyone is not willing to advertise they are, just yet!).
It may come as no surprise that the run-up to Christmas is the busiest shopping period of the year, with reports by the Fung Global Retail Tech indicating that the total UK retail sales for the Christmas period will be up in the region of £79 billion this year. This period is an important time for any manufacturing company, with huge potential rewards for those who plan accordingly for the busy festive season.
For this period to go off without a hitch, supply chain management is going to play a vital role for all organisations and could be the source of either a successful or disappointing year for many companies, in addition to whether cost-effective distribution methods were implemented to see a healthy return on investment.
As the digital sphere has expanded, and advertising has reached more and more individuals across a plethora of platforms, the demand for products has understandably grown at an exceptional rate. The lack of efficient supply chain management could result in detrimental results for any manufacturing business, whilst unorganised and costly distribution methods could result in companies losing out on vital net profits. Without effective strategies in place, low stock levels and last-minute order processing are somewhat inevitable which could result in low customer satisfaction if the company does not manage these effectively and get the product from A to B, particularly in the run-up to Christmas. Such failures in these areas will consequentially dent the image of any brand.
With this in mind, we take a look at what companies need to do to improve their supply chain management during the Christmas period:
Knowledge is King
It is important for businesses to identify which product lines are likely to be the most successful during this peak retail season, as well as predict when high demand for the product is likely to occur, by utilising the data you have available to you. These data sets should include a range of structured and unstructured data to allow you to get the best overview, including past sales and consumer comments.
This will mean that appropriate strategic plans can be put in place to accommodate these surges in demand and better prepare the staff and processes involved. We would recommend documenting the supply chain strategy and making this readily available for all the departments who would require it. It is also imperative that this document is able to adapt to the evolving needs of both the consumer and the business in order to achieve the best tactical and operational decisions, yet clear enough that it can be understood by everyone that needs it.
Always have the customer at the forefront of your strategies and supply chain structure. Although an obvious observation, businesses fail to put this into practise time and time again. Provide your customers with what they need – or alternative options should they require it – to avoid implementing costs for things that add no value to the customer experience; for example, paying for next day delivery for presents bought towards the end of October.
Monitoring is Monumental
Businesses will need to ensure that the predictions are mirroring the real-time results, and this means that organisations must monitor every aspect of their businesses to identify areas for strategic development.
Monitoring will also allow the organisation to be flexible enough to distribute the products appropriately to guarantee customer satisfaction.
Companies will need to monitor their sales and operational planning closely, to allow them to satisfy fulfilment options to include shops, inbound supply, the capabilities of capacity and the availability of the supplier, thus decreasing the need to depend on the customer distribution centre to match customer demand. This requires companies to have an agile approach to the distribution stages of their products.
Essentially, what really matters in the whole process is the ‘end-game’ objectives you expect from this Christmas period, which should allow you to continually set targets for improvement and monitor the overall performance through KPIs that are instilled into the culture of your organisation.
Outsourcing is Optimised
In order to keep up with the Christmas period, any areas of your business that are outsourced should be carefully considered. An estimated 85% of businesses outsource part of their supply chain operation to outside expert companies, predominantly warehousing or transport, and one of the main reasons for this business decision is that utilising external organisations for these services will save the company money. For some, this outsourcing will not always result in savings. It is best to consider business financial consultancy to ensure integral parts of your supply chain process are advantageous to your organisation, particularly during peak season, and switch from any companies who are not producing the results you require early.
Distribution is Designed
For a cost-effective distribution network, companies must try to reduce product handling between the point of supply and the receipt to the customer which should be reflected in the design of their supply chain. This will allow for the reduction of costs and the potential risks of error and damage, which can stem from too many stock locations and/or inadequate utilisation of the distribution centres.
Distribution can often result in huge costs for businesses, particularly when things go wrong with the shipping or logistic companies used for this service. You should look to reduce distribution costs where possible by employing business consultancy experts who will be able to identify the ways you can save money, but still receive exceptional service.
Because these points look at many areas of the supply chain, it is best to be systematic in your approach to business improvement given the differing variables. If you want to discuss any aspects of your business processes that are not working to your advantage, get in touch with our experienced team of specialists today. We can take a look at any area of your business that could do with vast improvements in order to save you money; why not let us take a look at how we can help you this festive season, and maybe Father Christmas will reward you with a better return on investments this year?!
Article by: Charles Reid