If you are a retailer who sells summer goods or skiwear, a wholesale supplier of Halloween costumes or Christmas trees or one of the hundreds of vendors who have dreamt about high revenue in holiday season. Keeping up with the demand fluctuations is a challenging task for businesses that generate revenue in specific seasons. Therefore, it is imperative to ensure that those products reach the market on time, in reasonable prices and proper quantity and your supply chain has to take care of all this.
It is often easier said than done when it comes to a seasonal supply chain. Progress can be delayed by a number of reasons. Problems can range from issues with the suppliers to geopolitical and economic events, poor planning and infrastructure concerns.
So how can you optimize your supply chain with high levels of demand in limited amount of time? There are several ways of doing that. Have a look at these four critical success factors for building a well established seasonal supply chain.
1.Be familiar with your customers.
Be aware of their preferred terms of purchase and the way they want the product delivered to them. This knowledge will drive the decisions and processes of your supply chain.
Whether your customer wants the product delivered at the original point of export, destination port of the entrance or at the doorstep? Is the consumer a kind of retailer for whom you manage the distribution and sourcing? This type of customer may want the product delivered from source to the shelf. You can be a wholesaler that sells to the vendors. You have to look at the core competencies of your clients and manage the supply of products in a way that align with their strengths.
Different sellers have different demands. For instance, one retailer may want the products in most competitive prices and may be ready to receive them at the point of manufacturing or collect them at the point earlier in supply chain. Other retailer may want you to manage everything from the procurement of goods to handling custom clearance, duties, managing relations with suppliers and determining the right mode of delivery for the products. In any case, the first step in managing an optimized seasonal supply chain is to know the customer preferences for product delivery and structuring the requisites accordingly.
2.Prediction and preparation for seasonal orders
As it is important to understand the customer preferences for product purchase and delivery, similarly you have to be able to make a demand forecast in order to deliver the right amount of product at right place at the right time. There are various ways to carry out the demand forecasting. Some businesses leverage the historical records. Others analyze market trends and recent trends of product purchase as well as events that drive the industry to create projection. Whichever tools and techniques are used to predict the demand, consider these points when leveraging the demand.
- Type of products being sold
- Type of customers you are selling to
- The duration of planning and forecasting process
- The impact of minimum order quantities on the scope of your plan
- Contingency approach if the product demand outsources the anticipated sales
Next step is to provide your trading partners the accurate demand prediction analysis that will allow them to meet the production requirements and provide the product to be delivered on time. Depending on the type of product and the customers, order may need to be placed three, four, five or even six months before the delivery. Instead of dealing with seasonal fluctuation when you are running out of time, developing an effective strategy for demand forecasting is essential.
3. Determine how your visibility enhances
You have determined the way your customers would like the product to be delivered. You have evaluated the anticipated demand of the product and provided a plan for production to the suppliers. Now, the next step is to determine how much visibility is needed to track, reallocate or divert the inventory to reduce the disruptions in supply chain. Consider these factors preceding the order placement.
1.How aware are you of the production activities and how much collaboration with the suppliers is there? There should be an order or postal order management system in place to keep track of upstream production activities. You must be notified when the production process reaches a critical milestone to prevent shortage of products. Determine how major disruptions in the supply chain can be avoided by taking necessary measures.
2. Be aware of the nature and complexity of the products that are being produced. If the products are greatly engineered then they may require more processing time and if the products are commodity items, they may be available comparatively earlier.
3. Determine the methodology used for sourcing of goods. You can be sourcing the finished products from various different suppliers or you can be involved in the single sourcing of the products.
4. Create an advance lead time. You will not be able to meet the re-order demands efficiently if sufficient product with proper holiday packaging is not available.
If you have considered all these factors and successfully created the hypothetical scenarios, trained workers at the point of manufacture and delivery, integrated the statistical deviations and utilized the necessary technology, then you are doing more than half of the work right.
5.Make sure you control the process instead of the process controlling you
You can efficiently adapt to the unexpected changes if you are able to understand the nature of your client’s business, have various supply chain solutions in place, inventory and order management systems, track record of each process and effective communication with the customers and suppliers.
Suppose you have placed the order four to six months prior to the delivery. You receive timely updates about the critical milestones in the process of production. Your customer has placed an order but there is some issue with the order. You can notify your customer instantly about the unavailability of the product and agree to the partial fulfillment of the order. By managing the expectations in a better way, customer relations are enhanced without breaking the deal.
Integration of people, processes and technology in a system to ensure smooth coordination guarantees a successful seasonal supply chain.