2014 is coming to a close and as we herald in the New Year, retailers around the world are busy gearing up for the holiday season. However, the diverse ethnicity and multi-cultural population in Southeast Asia presents a unique challenge as the region goes through several festive celebrations all year long. Be it Christmas, Chinese New Year, Songkran or Hari Raya, retailers need an efficient and effective Distribution centre (DC) to support a consumer spending peak that takes place every quarter within the region.
Additionally, International brand expansion in major Southeast Asian markets have picked up in recent years, as robust economic growth has created a larger consumer population . This, combined with the festive peak periods adds Omni-channel pressures on retailers and drives the need for a strong fulfilment infrastructure to effectively manage customer orders, no matter when and where they originate. Companies must respond to these new demands in order to deliver a great customer experience while simultaneously fulfilling orders profitably.
According to Bain’s Insights, one of the rules for winning in emerging Asia is to adopt an early omnichannel strategy that will help companies to reinforce their overall competitiveness . As such, preparing the distribution centre to handle the strain of the holiday orders and permit the supply chain to be flexible and agile is central to holiday season success. Here are 5 tips to prepare the DC for the peak season:
Benchmark DC systems to handle the volume. In the e-commerce era, peak volumes often spike dramatically, sometimes reaching 10 to 20 times their normal size. Some facilities see orders soar ninefold — but taking nine times as long to meet demand isn’t an option. If your system isn’t ready for the increase, you’ll face productivity problems.
Plan for increased staffing needs. How many shifts do you plan to run during peak season? How many temporary workers will you hire, and what sort of tasks will you allow them to handle? It’s best to answer staffing questions early. If you aim to keep your workers happy, you should also think about some sort of incentive plan that pays bonuses for workers who thrive during a very active time.
Get out from behind the desk. Manhattan Associates’ research finds many managers and supervisors spend 60 percent or more of their time behind their desks. Solutions such as mobile labour management systems let companies track production from a tablet—allowing managers to spend more time away from the desk to check in on performance issues or production lags.
Set order deadlines earlier. The holiday season can become chaotic in part because retailers might promise items ordered right before Christmas would arrive in time. Moving your order deadlines a day or two earlier is likely to reduce much of your last-minute stress and set more realistic fulfilment expectations with consumers.
Make your inventory omni-channel. For a handful of huge retailers, it makes sense to divide inventory into one stream for store replenishment and another for e-commerce fulfilment. But for most other companies, it would be wise to tear down the walls separating types of inventory. You’re placing undue stress on the DC when the same product is divided into different segments.
No matter how much you prepare, peak season is always difficult. The omni-channel landscape is competitive, and consumers have proven willing to share their displeasure with late or incorrect orders on social media.
Distribution centre mistakes can be mitigated by following the simple steps above, which will help create a more cheerful—and profitable—holiday season.