What makes a holly, jolly Christmas? Giving presents, spending time with family, eating more food than is humanly possible or watching our favorite Christmas films…
For the supply chain industry, a perfect Christmas consists of precise planning and effort to guarantee everything goes to plan without any disastrous mistakes. Without this, people may not get their presents delivered on time or may be stuck in the airport waiting to get home, or go to the store to find its run out of hams. All of these things highly depend on the supply chain and how it operates throughout all processes. So, what does the supply chain do in order to ensure a holly, jolly Christmas?
Employment is key!
Since September, I have seen articles about companies releasing their plans for the Christmas holidays, including the amount of Christmas vacancies they are offering in addition to full time workers. These particular articles are analyzing the amount of workers needed for the holiday season in comparison with the rise in demand and increase of sales year after year in areas such as e-commerce. Brick and Mortar stores are being increasingly pressured from websites such as Amazon. People are either becoming lazier or giving into the fact that technology is becoming the leading resource in the world. More and more consumers are using their mobile phones to purchase items, a fact that can be shown by this year’s Black Friday sales. Therefore, more workers must be hired to cope with this kind of demand. Factory and warehouse workers, as well as drivers, are essential for products to be packaged, scanned and delivered on time. Preparation is the deciding factor to success at this time of year, so companies have got to get their employee scheduling plans right.
Companies must also take training into consideration. Amazon is expanding its workforce by 40% during the holiday months. In order to optimize training periods, Amazon has introduced the use of technology to train employees in less than two days, in comparison to an average of six weeks. This utilizes more of workers’ hours by decreasing the time it takes for them to become knowledgeable on the job, therefore increasing their efficiency.
Delivery is everything!
Making sure gifts are on time is crucial for Christmas to be, well, Christmas. The supply chain industry must plan all routes for delivery, whether that be by lorries, planes or bicycles. Weather and other outside factors can unexpectedly affect deliveries, so this must also be accounted for. If presents aren’t delivered, it not only harms the family Christmas time but could also harm a company’s reputation.
Last year most major retailers, such as Walmart, waived shipping fees on Friday December 18 to encourage customers to do their final online shopping so as to ensure timely delivery and avoid disappointment. This was encouraged by delivery services UPS and FedEx, an example which shows the lengths companies go, in order to satisfy consumers at this time of year.
Learning from past mistakes helps retailers analyze how they can improve to avoid disasters and unsatisfied customers. Improving delivery channels and securing shipments are all steps which should be deeply examined and taken months before the holiday season.
Planning is vital!
Demand planning is fundamental to supply chain management. Just like parents planning presents for their children, supply chain workers have to vigorously plan as well. The products which will be produced in time for the holiday season depends heavily on historical data covering consumer demand and successful products. This is how supply chain managers determine which products to focus on. This planning starts in January and carries on throughout the year, analyzing new trends that appear.
Without the right amount of planning, retailers could see their shelves fully stocked with unwanted toys or completely empty from underestimating demand. The hottest toy for 2016 has been deemed as Hatchimals, however manufacturers underestimated its popularity, leading to eventual toy shortages this Christmas season. Sudden flows of demand which aren’t accounted for can affect the whole Christmas selling period. In one store, a delivery of more than 70 of the toys was supposed to last until the week before Christmas but sold-out in less than 2 days. This shows the need for forward planning as toy retailers are now struggling to source more Hatchimals ahead of the big day.
Closing thoughts
Trying to ensure a holly, jolly Christmas is no easy task for supply chain managers. There are so many internal as well as external factors to take into consideration: adverse weather conditions can affect delivery times, the amount of workers in factories can affect input and a lack of planning can affect supply meeting its demand. All the things talked about in this article portray what supply chain managers and workers must do in the run up to Christmas.
Consumers are not necessarily aware of all the work and effort put in by supply chain workers to deliver their presents. Everyone wants to have the perfect, fairytale Christmas. Through the efforts of these particular workers, consumers can get one step closer to that happening, and a holly, jolly Christmas can be had by one and all.
