What solutions can organisations and retailers do to ensure that they are as fully prepared for the peak season as possible amidst supply chain disruptions?
Supply chains are now gearing up in the hopes of not only bringing joy to their customers, but also, to increase their profit margins. For both retailers and supply chains, Christmas is the busiest time of the year, and within the UK alone, consumers are expected to spend around £1bn throughout the festive shopping period, let alone internationally. Due to big discounts, it is predicted that 57% of consumers finish their Christmas shopping during Black Friday, leaving just 43% remaining, to shop, before the big day.
Prior to Christmas, communication between trading partners and supply chains is crucial in preventing product shortages and avoiding late deliveries. By allocating enough supplies and evaluating supplier compliance against shipping tolerances, all inventory should reach its destination in time; and ensure optimum, operational, inventory stocks.
Distribution centres and warehouses have standard procedures in place, to prevent any misplaced items which can often hinder ordering, fulfilment and transportation costs, whilst negatively impacting profit, wasting time and costs on additional monitoring. Using in-depth and intelligent data analysis, retailers can gather structured and unstructured data, consisting of past sales figures, which, when analysed can be used to distinguish potential correlations, which in-turn, can help brands anticipate the big trends of the Christmas season for the following year.
However, forecasting consumers’ behaviour, can be a rather unpredictable science when the festive season is in full swing. Best practice usually dictates that most retailers are expected to hold increased seasonal stock levels, with focus on their best-selling items, to maintain a high level of inventory accuracy, whilst simultaneously ensuring consumer satisfaction, meaning they leave neither their stores, nor their websites, empty handed.
Throughout the peak festive season, within both online and offline shopping, supply chains increase efforts to ensure that they can avoid late deliveries, which can sometimes result in lower profit margins and further charges for both themselves and retailers. When companies monitor their supply chains, and outputs match expectations, retailers, suppliers, and consumers alike, are kept happy. ITM catches up with Dennis van Bodegom, Director Nothern Europe from Shippeo to discover is anything can be done to prevent a Christmas catastrophe.
Why are there supply chain disruptions?
The supply chain is in turmoil, and it could not happen at a worse time. Major brands are already warning of delays ahead of Black Friday (which, this year, falls on Friday 26 November) and Cyber Monday (which falls on the Monday following the main Black Friday weekend, i.e., 29 November). The fallout from the pandemic, a shortage of drivers and containers, and rising costs associated with these problems are stoking fears for the main holiday of the year. Many retailers are advising customers to get their Christmas orders in early, and an increase in online consumer spending is expected to pile on the pressure on freight and shipping links. Add to this the delays in product manufacturing due to worker shortages and slower than usual component production, and productivity in the areas of transport, docking and delivery has never been more vital to make up for lost time.
To see the full article please see our November/December issue here: November/December 2021 Single Issue form – International Trade Magazine (intrademagazine.com)