Retail peak season is around the corner. For some retailers, it’s already here. With so much of the year’s success riding on the next five months, how can you ensure your warehouse and logistics service levels are ready to meet the challenge?
Logistics managers often prepare all year for the back-to-school and holiday shopping seasons. Between service level agreements and competitive bench-marking, cross-dock improvements, and optimizing temporary staffing levels and training, preparing now could help ensure a successful season.
Is your organization ready? Perform this three-step self-assessment to evaluate your current service levels and determine peak-season preparedness:
Track your Service Level Agreement (SLA). Is your SLA with your logistics, warehousing or cross-dock partners performing to contracted standards? Ideally, SLAs should encourage your third party logistics (3PL) provider to add value to the operation, including benchmarking against the competition or industry standards. Whether it’s a cross-dock or an outbound shipping operation with thousands of SKUs, the SLA should track missed shipments or outbound shipping accuracy, picking errors, or other areas of weakness or even opportunities for LEAN improvement, especially if the operation is below industry or competitive standards. With some intervention, customers who historically have had inventory accuracy in the 70s could be seeing scores of 90 or higher.
Improve shipment time and cross-docking. Sagging throughput and flip times can slow the entire organization and erode margins. Shipment time and cross-docking should be tracked closely to ensure the operation stays on-point. Whether tracking time in the warehouse or cartons per man-hour (CPMH) or skids/pallets per man-hour, variances should be broken down and evaluated to spot areas of weakness or bottlenecks. Should the organization staff up, and if so, by how many people? Have you performed value stream mapping (VSM)? If so, have you revisited it in the past year, as some VSM facilitators suggest? This can help identify areas of improvement, including operator function, elimination of extra touch points, better positioning of product or zone picking based on activity.
Identify temporary fill needs. Peak season’s arrival is no time to staff up. Many major shippers and logistics organizations hire associates for by the beginning of summer. Why? Often, new or temporary hires will under-perform against seasoned staff or returning temps; staffing early can improve personnel onboarding and efficiency. Moreover, finding qualified personnel, especially through temp agencies, will become more competitive deeper into the season. If you need upward of a half-dozen employees a day, but your agency only is able to deliver half that, HR knows it has to find additional agency partners. Proactively tracking your temp fill rate can avoid shortages.
Is your 3PL partner helping you maximize your efficiency? Working together, you can prepare a self-assessment of current operational standards and areas for improvement. The 3PL partner can help forecast the market based on previous years’ or quarters’ results and current year growth. It can establish volume or traffic expectations, especially based on any promotions that could boost volume. They can help monitor internal network performance, and where bottlenecks or slowdowns might be anticipated.
With sophisticated understanding of data analytics and LEAN processes to identify areas of weakness, your organization can stay atop its service levels and can achieve positive results for peak season – and all year long.
Authored by Ed Kelly
Ed Kelly has spent 14 years in the retail industry and today is a Group Logistics Manager with Ryder, specializing in supply chain and logistics solutions for the retail and consumer goods segments.