Warehouses have been put under ongoing demands during the past 18 months and will continue to face these challenges with the forthcoming peak season for Black Friday, Christmas and January Sales. This peak season is already underway and doesn’t look to be ending soon with warehouses still dealing with high return volumes well into the end of January.
During this time, supply chains often get disrupted, and warehouses must dig deep to find ways to operate more efficiently. One of the ways a warehouse can achieve more efficient operations during peak season is by predicting volume accurately.
Here’s why predicting peak season warehouse volumes is important, some of the challenges warehouses are facing this year, and strategies warehouses can use to predict volume accurately.
Volume prediction is warehouses is key to success
Did anyone predict that the Rubiks Cube, Cabbage Patch Kids, or the latest consoles toys would be such Christmas hits? Someone might have, but what about the precise volume of consumer demand? Probably not, or there wouldn’t have been such shortages (and so many disappointed children and adults) during the years when millions or tens of millions of these items were sold.
Sure, it’s the season to be jolly. But, for warehousing businesses, it’s also the season for preparation. Across the industry, warehouse operators are focused on one of the most critical components of peak season success – forecasting volume.
Volume forecasting is increasingly vital during the months of October through December because it drives the resourcing and allocation of space, shipping, and labour. It’s not only essential to know your numbers so that you can prepare internally for what lies ahead, but you also need to keep your partners in the loop so that they can allocate those same resources effectively. If you don’t, the resources might get promised to a competitor.
Challenges warehouses will face this year during peak season
A year after one of the most volatile peak seasons in recent history, the world is bracing for another season that promises to be just as disruptive due to Brexit and shortage of lorry drivers. While issues like global economic uncertainty aren’t as glaring as they were last year, others will continue to be challenges for distributors, warehousers, and retailers during the 2021 peak season. Here are a few of the factors that are making this year far from ordinary.
Consumer Demand Is Not Slowly Down
Soaring eCommerce growth over the past 18 months has kept retailers and shippers on their toes, particularly through peak season. According to Digital Commerce 360, shoppers spent $201.32 billion online during the 2020 peak season, a stunning 45.2% increase from the prior year.
The incredible pace of eCommerce growth has barely slowed since last year. Consumers have found that they enjoy the convenience of shopping online and plan to do more of it. eCommerce sales are expected to hit $908.73 billion in 2021, far outpacing forecasts prior to the pandemic.
At the same time that consumer demand for goods runs high, consumer expectations for service haven’t budged. Even though businesses are facing challenges with labour and supply chains, people still want their stuff on their doorstep as quickly as possible and don’t like seeing empty shelves.
COVID-19 Continues To Cause Disruptions
The uncertainty of the ongoing COVID-19 pandemic will continue to make business operations and planning difficult. Despite relative strength in the economy, COVID infection rates continue to increase, and no one knows how colder weather is going to impact the situation this year.
Labour shortages are continuing problem in the warehouse industry. The warehouse and transportation industry had a record 490,000 job openings in July, a figure that is expected to rise in the coming months.
Ongoing Supply Chain Bottlenecks
One of the primary lessons learned during the pandemic is that transportation routes or global supply chains can’t simply pivot when something bad happens. While companies can hit the pause button, re-starting operations aren’t as simple as it seems. Re-establishing key components and shipment channels takes time.
Anyone in retailing, 3PL, or the warehouse industry understands that we have an ongoing supply chain problem. The takeaway for peak season is that planning is vital so that you can identify as many potential bottlenecks as possible and create contingencies if they are available.
Key strategies for predicting peak season warehouse volumes
Obviously, planning ahead is the best way to have a successful peak season. You can do this with the following forecasting strategies.
1. Maximise Your Data
Inventory forecasting is all about data. Before you can figure out what you need to order and when you need to order it, you need to understand your historical numbers. While not a perfect solution given changing conditions, this is a good starting point for peak season forecasting.
2. Review Sales & Stock Levels Each Year
There’s no better teacher than experience. Tracking order volume may not be enough to get the precise figures you need. After a peak season or two, your team will gain valuable experience that allows it to react to changing market conditions. But a year is a long time, and memories fade. Take notes each year about what happens so that you can refer to them for better results moving forward.
3. View Real-time Stock Levels
It’s tough to know what you need to order if you’re not sure what you currently have. You need timely, accurate data that gives you visibility throughout your operations. Real-time inventory tracking allows you to monitor product stock levels and compare them against your forecasts. If they aren’t lining up with your estimates, you can look into the cause to see if it will impact the rest of your operation.
Accurate inventory forecasting shouldn’t be done in a silo. Your warehouse should involve all stakeholders, including finance, operations, and external parties.
5. Use the Right Techlology and Processes
Replenishing inventory as well as every other function inside a warehouse can be challenging during peak season. You can create more efficient warehouse operations with technology solutions like mobile carts, RFID tags, and warehouse management systems (WMS). These solutions can also help you compare your results to your forecast in real-time and alert you of any disparities.
We are living in unprecedented times where eCommerce sales are soaring, and businesses are struggling to deliver products through a damaged supply chain. Now is the time to make every effort possible to anticipate warehouse volumes during the upcoming peak season so that you can keep up with client and customer expectations and set yourself up for even more business next year.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale/retail distribution, online fulfilment, and manufacturing warehousing.