The Christmas peak can cause supply chains to quickly buckle. Sales spikes across omnichannel operations can overwhelm logistics software systems. Added pressure and constant demand can cause shocks that knock processes completely out of kilter, with problems intensified by underlying inefficiencies.
Typical periods of supply and demand sometimes, wrongly, tolerate a certain margin of error in supply chains. This will be put down to factors such as large order volumes, multiple different sales channels or rapid growth. Small issues tend to be treated as an inevitability, but can become huge problems during peak periods and quickly cause bottlenecks and delays, stock availability issues and missed customer orders.
These circumstances tend to prompt a trend of retailers reviewing their logistics providers once the peak has tailed off. Here’s the three key questions they should be asking to find a supply chain partner who can deliver peak performance.
1) Does the 3PL provider develop their own supply chain software?
There really is no one-size-fits-all when it comes to supply chains, and even more so for omnichannel retailers. Every operation has its own unique opportunities and challenges, and nuances that are influenced by sourcing, customer demands, product dimensions, strategic goals, operating costs and margins. This is why it’s so important to determine a supply chain partner’s technical expertise. Do they have the in-house capabilities to develop and constantly adapt and scale supply chain management software that’s bespoke to a retailer’s exact requirements and objectives?
It may be the case that a logistics company provides an off-the-shelf software solution. This could have limitations in terms of capacity and functionality, and it may also prove time-consuming and complex to adapt the system as a retailer’s requirements change and grow. Advanced Supply Chain has a specialist in-house team of IT experts who develop and manage its own award-winning supply chain software. It’s an approach that enables Advanced to effectively configure solutions according to what retailers want to achieve and ensures solutions can be quickly scaled to provide agility to cope with peak trading. In some instances, where Advanced works with large-scale retailers who utilise several supply chain providers, customers will opt to use Advanced’s software as the central supply chain management solution.
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2) Can the 3PL do more than fix peak problems to create new opportunities?
A post-peak review of supply chain partners will often start with problem solving. Retailers tend to approach Advanced, eager to fix specific issues they’ve just experienced elsewhere during a busy period, so they are fully prepared to capitalise on the next spike in sales. This is a good starting point for procurement, but reviews and briefs should stretch beyond addressing prescriptive problems by challenging a prospective 3PL provider to demonstrate their full experience and expertise.
Innovative, tech-led supply chain partners with global capabilities will be able to draw on a wealth of knowledge and insight to identify supply chain opportunities that aren’t within a retailer’s remit to know about. As well as addressing the problems a retailer puts to them, the logistics partner will be able to review end-to-end supply chain operations to find new efficiencies and processes that truly optimise performance. This could help reduce margin dilution, make operations quicker and improve overall circularity.
3) Does the 3PL have the ability to deliver what matters to shoppers?
Peak periods often encourage consumers to think more about their purchases, because, quite simply, they are buying more. It puts their spending into perspective, whether that’s the price of the products they are buying or charges for deliveries and possible costs for sending items back. They are also more likely to pay closer attention to returns policies, delivery options and timescales, and may also think about the environmental impact of their shopping.
Shoppers want retailers to satisfy a wide variety of demands, from offering good value RSPs, through to providing quick, convenient and no-cost returns, and enhancing sustainability and circularity. Retailers should ensure their supply chain partner understands these factors and has the ability to develop strategies and solutions that will deliver in these areas. It could help strengthen consumer satisfaction and build brand loyalty that drives sales well beyond peak.
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