Being prepared for the unexpected
The tendency to panic around the peak season of shipping is a sign of poor planning. Ideally, your business should be prepared throughout the year because once planning and execution become a year-round endeavor, your business will be less likely to suffer the mishaps of increasing or reducing demand at different times. You should pay particular attention to your logistics and order fulfillment because those aspects are often the most affected when poor planning is present.
Taking note of trends and learning from them
Although seasons are cyclical, 2022 is likely to present unique logistical challenges because of several factors. The first is the post-pandemic recovery in which demand is exceeding expectations. The second is the traditional and recent problems in the shipping industry, including delays and shortages of space. The third issue is the increasing preference for e-Commerce, meaning that order fulfillment is essential for the survival of many businesses. The fourth issue is the growing availability of efficient technologies that can improve handling your orders.
Smart businesses are rethinking their inventory strategies to match customer needs while following the best aspects of their respective business models. The increasing controls placed on parcel shipping networks and the partners that use them are a case in point. Cloud technology can be useful when trying to revolutionize how you deliver orders to your clients. Indeed, the innovations include multi-carrier shipping systems. All these innovations are a response to a market that is increasingly volatile.
The role of technology in business planning and logistics
It is imperative to utilize the latest and most appropriate technologies for your logistics. Comprehensive packages may be cheaper than buying piecemeal knowledge, hardware, and software. For example, you may need to use predictive analytics to understand how your demand patterns will change over the year. This is the time to engage with new technologies because manufacturers and retailers are revamping their order fulfillment and parcel shipping arrangements in the wake of the Covid-19 pandemic.
The expectation is that the new normal will hold high competition for customers, shipping space, and order fulfillment capabilities. One in every four supply chain leaders has complained about problems in production and distribution following the pandemic with the resultant negative effect on future operations. Meanwhile, customer expectations of quick deliveries remain as high as ever. The only solution is to rework your logistics operation to be effective and efficient.
Why you need to adopt a year-round strategy
The first advantage of being prepared all the time is that you reduce the risk of disappointing and losing your customers through inefficient practice. There are several factors that you will address if you are prepared, including:
- Unpredictability in supply chains: The disruptions that will inevitably affect your supply chain are not always predictable. They can come at the most inopportune times. By accounting for future eventualities, you can minimize the supply chain risks. A case in point is where your suppliers are not performing to expectations or if your transportation system suddenly breaks down. Since these disruptions happen often and inevitably, you can start mapping them and planning to respond in case they occur.
- Impacts of weather variations: Inclement and unexpected weather patterns can impact the ability to manufacture, transport, and deliver merchandise in e-Commerce. Examples include a typhoon near Chinese ports and Hurricane, the flooding in British Columbia, and the Texas freeze. Global supply chain resilience remains an issue. A case in point is how McKinsey estimates that hurricanes could disrupt leading-edge chip production. A proactive order fulfillment framework is of the essence to respond to these weather variations.
- Conflicts abroad: It is a mistake to suppose that offshore conflicts do not matter to domestic business. As the Russian invasion of Ukraine has shown, geopolitics is interconnected. Russia is now under a quasi-embargo which is raising fuel across the globe. This, in turn, increases the price of virtually everything, including barley and wheat. Gartner recommends increasing visibility in all the tiers of the supply chain network. This transparency is particularly important for tier-1 suppliers. If possible, you should be diversifying your routes and sources.
- Shortages of labor: Apart from the absences caused by attrition and the Covid-19 pandemic, businesses must contend with demands for wage increments. There is a shortage of qualified and willing staff to manage carriers and warehouses. Companies are reporting high levels of absenteeism, yet the supply chain is as critical as ever. Labor shortages reduce the reliability of your warehouse operations. Kim Moody has reported a shortage of at least 80,000 drivers based on the American Trucking Association data. Therefore, you need to ensure that you have reliable alternatives if the current staff cannot meet your demands.
- Rising fuel prices: Gas or fuel is a crucial driver of costs for many businesses. A sudden spike will significantly increase the costs of production. Besides, the need to control fuel use might mean that there are fewer options regarding how you transport your cargo. Shippers are often saddled with all the surcharges that manufacturers and suppliers pass on. Customers will vote on their feet if these additional costs make the merchandise uncompetitive.
- Increasing consumer expectations: Despite all the challenges that the industry has been facing, consumers are still demanding a high-quality service with all their orders being delivered quickly and intact. Consumers do not always lower their expectations when an industry is facing challenges. If anything, consumers become more price-sensitive and time-conscious during a crisis. They will not hesitate to take their custom elsewhere if they feel that your company is not meeting their expectations. The entrance of big players like Amazon means that nearly half of all customers expect delivery within two days of ordering. That can be a tall order for companies that are ill-prepared for these demands.
Although the industry remains volatile and even uncertain, those involved in e-Commerce and related activities must prepare for all these eventualities. That calls for an approach that does not just raise the bar during the peak season. Instead, you should ensure that your business is always preparing. Early planning, forecasting, and modern technologies can help you achieve these goals.