Exploring the Challenges of Peak Season Warehousing
Peak seasons have positive impacts for warehousing businesses. They bring the potential for significantly increased revenue and profit, thanks to the opportunity to sell in greater volumes and often the ability to charge premium prices.
But seasonal demand also puts stress on operations – so much so that achieving success during peak seasons hinges on overcoming some specific challenges.
Following on from our guide to preparing for warehouse peak periods, here’s a closer look at six main areas that bring challenges in warehouse management during peak seasons.
When is warehouse peak season?
In the context of warehousing management, a peak season typically refers to a period of increased demand for storage and distribution services. This coincides with specific times of the year when businesses experience higher sales and shipping volumes.
In the UK, the common peak season for warehousing operations is between October and December. There’s Halloween, Guy Fawkes Night, Black Friday, Cyber Monday, Christmas, New Year’s Eve and then January sales. One of Amazon’s three Prime Days is held during this time and there’s also Single’s Day in November, which is gaining traction outside of China.
Of course, if you retail BBQs or outdoor furniture, or if you are a school supplies provider, then you will have different peaks. And there are also peaks at other times that occur prior to events like Valentines’ Day, Mother’s Day, Easter and Father’s Day.
But for most businesses – and for consumer and retail companies in particular – the last quarter of the year is the busiest. Substantially increased consumer shopping sees retail spending ramp up during this ‘golden quarter’ and some distributors see as much as a tenfold uplift in sales volumes.
To cope with these peak season sales, warehousing facilities may need to ramp up their staffing, storage capacity and logistics operations to meet the heightened demand. Companies must plan and prepare to meet the challenges of these peak business periods to ensure smooth operations and timely order fulfilment.
Challenge 1: Managing increased stock levels.
To meet increased levels of sales, you will want to store larger quantities of stock. You may also be introducing new, seasonal products, which will need storage locations.
Higher levels of stock can see you begin to struggle with overcrowded and messy storage areas. With this comes the risk of stock errors. Your staff may be confused about where items have been placed or moved to and consequently may have difficulties locating items.
Maintaining accurate stock records is crucial, otherwise your activities like picking and putaway can be slowed down. Equally, if you have not planned where to locate your stock, you may end up placing it in inefficient locations, again slowing operations down.
To smooth operations, you will need to strategically plan the placement of goods within the warehouse so that you optimise your use of space. Implementing advanced stock management procedures will also ensure you can track stock movements in real time, so staff always know where to locate items.
Additionally, cycle counting can help. There is insufficient time during peak seasons for full stock counts, so making counts of individual pick faces or fast-moving stock more frequently can help you stay on top of your stock situation.
Challenge 2: Planning for the right amount of stock.
Accurately predicting customer demand at any time is difficult. But it is much more challenging in peak seasons.
If you overestimate the amount of stock required, you will be left with stock you’re unable to sell, or which is out of date. Holding excess stock comes with additional costs, too. To shift it, you may need to run promotions and offer discounts, which will mean a financial loss.
Conversely, if you have insufficient stock, the result is missed sales opportunities, disappointed customers and reduced revenue potential.
To maintain the right amount of stock, you will need to undertake a careful analysis so you can accurately forecast demand. Use inventory planning and demand forecasting software that analyses historical sales data and employs advanced techniques to improve your forecasting accuracy.
By collaborating with suppliers and large customers, you can align your purchasing accordingly. But you may need to develop contingency plans for any unexpected fluctuations in demand.
Challenge 3: Labour and staffing.
You will need more staff during peak seasons. While attracting, recruiting and training these temporary employees can be time-consuming and costly, you cannot afford to be short-staffed during peak seasons.
With inadequate staffing, your order fulfilment will be delayed, resulting in dissatisfied customers. Poorly trained temporary workers may also make errors in stock management, perhaps picking or packing items incorrectly.
You will need to start your recruitment and training processes well in advance of your peak seasons. Offering incentives or benefits can help to attract and retain temporary staff. It’s beneficial to cross-train staff too, so that they can easily move between activities as the need arises. Workers that are comfortable with picking, putaway, cycle counting and driving a forklift are more valuable than those trained in just single disciplines.
Once on board, you can optimise worker productivity by using the labour management functionality of a WMS. It compares the time taken for individual tasks with an agreed standard. You can measure activity in real time and track achievements over longer periods. This data can be used to incentivise and encourage workers to achieve set targets.
Using autonomous mobile robots (AMRs) in the warehouse is one solution to peak season labour issues that can reap excellent benefits. They can be quickly deployed, are easy to integrate with your existing infrastructure, are relatively low cost and can immediately boost your productivity.
Challenge 4: Order fulfilment.
With increased orders, it becomes harder to meet customer expectations. Order fulfilment becomes much more pressured during peak seasons, and the faster pace and higher throughput can lead to order processing bottlenecks and an increased likelihood of errors.
This risks your customers not receiving their orders in good time. You don’t want to be highlighted as a supplier with dissatisfied customers who didn’t receive their Christmas orders in time, for example. By taking steps to prevent this, you can safeguard your reputation from potential harm.
The solution here is to streamline your warehouse processes to minimise handling time and maximise staff efficiency. Robotics can again help, as can a warehouse management system (WMS) that will prioritise and manage your orders efficiently. Using a WMS, you can improve your productivity levels by implementing different strategies, such as using alternative picking methods or implementing task interleaving.
Challenge 5: Space constraints.
To accommodate higher levels of stock, you will almost certainly need to reorganise your warehouse. This can be a complex task. But you can’t afford to have overcrowded storage areas that may impede the ability of your staff to access products easily and quickly.
Consider temporary storage solutions like additional stacking and racking systems. You can optimise your space using putaway strategies. This might see your more slow-moving goods stacked higher up, with new goods or your seasonal fast-movers located at more readily accessible heights.
If your predictions are that your sales will increase far beyond existing capacity, you will need to arrange some temporary, external storage. Overspill storage space can act as a replenishment location, allowing you to top up from it when you need to.
Challenge 6: Technology and system overload.
Increased demand during peak seasons can strain the technology and systems you use in your warehouse. If you’re running outdated software, you may experience slowdowns or even crashes, which will have a negative impact on your operations.
Slow-running systems and failures like this can disrupt your order processing and stock management. This can mean delays and errors that can influence customer opinions.
Investing in robust WMS capable of handling peak loads ensures that your warehouse remains resilient in the face of increased demand. It helps your operations to run smoothly, minimises downtime and reduces the risk of mistakes and holdups. In turn, you can maintain a positive customer experience and preserve your reputation for reliability and efficiency.
Meeting the challenges of peak season using a WMS.
Using a WMS can help you rise to the challenges of warehouse management in peak season. It can optimise your processes and warehouse activities to manage increased stock volumes and order fulfilment, preventing bottlenecks and alleviating storage issues.
A robust WMS gives you real-time visibility into your stock, which allows you to precisely monitor stock levels and movements, which is critical in peak seasons.
Labour management can help your workforce to operate at peak efficiency, ensuring orders get out quickly and preventing customer disappointment.
Accuracy is improved, and by using robots and more efficient operational methods, you will benefit from greater efficiency. This will ensure that you can meet the higher throughput and reap the benefits of increased peak season sales and profitability. With the right technology in place, you can be well-prepared to meet the challenges of peak season warehouse management head-on.