With the holiday season simultaneously presenting the promise of soaring profits and the daunting task of meeting rising demand, it’s a double-edged sword for businesses.
Warehouse operations will likely be put to the ultimate test in the face of overwhelming demand: consumers are expected to spend $221.8 billion online for the 2023 holidays—a 4.8% year-over-year increase.
Businesses will have to maintain optimal seasonal inventory levels, tackle workforce pressures, and deal with high customer expectations around timely order fulfillment—all while ensuring a safe environment to avoid injuries.
Those who want to succeed will need to prepare their warehouses ahead of time. In this guide, you’ll learn about six holiday season challenges warehouses face and how to overcome them.
With an influx of customer orders during the holidays, predicting accurate demand and maintaining the optimal inventory levels can be a delicate balance. According to market research by ProGlove, just 39% of warehouse operators can predict holiday season trends.
The solution: Streamline inventory management
Use advanced inventory forecasting techniques like predictive analytics to analyze historical data and market trends to make accurate demand forecasts.
Also, consider real-time inventory tracking to monitor stock levels to prevent overstocking and shortages and set suitable reorder points: the inventory level at which you should reorder to avoid stockouts and excess stock.
To streamline these processes, use a warehouse inventory management system. It can also help you automate processes and manage the many areas of operations like inventory tracking, order picking and packing, data collection, and resource allocation.
Higher seasonal demand can put a strain on warehouse space.
The solution: Optimize warehouse layout and space
While you may need a larger warehouse, it’s always wise to first optimize existing space. For example, you can use warehouse software to identify products frequently purchased together in the peak season. Then, reorganize your warehouse by combining workstations and products to reduce walking times and improve workflows.
Another option is to utilize vertical space by installing different pallet storage methods, like push-back or single deep racks.
Warehouse automation—technology that automates warehouse processes—can prove especially useful in maximizing space. For instance, Decathlon deployed autonomous mobile robots (AMRs) and goods-to-person (G2P) robots to increase storage capacity by 20%.
Managing the workforce during the holiday time can be a juggle. Besides the challenge of finding seasonal staff, you must strike the right balance: Having enough staff to meet demand without overburdening them or breaking the bank.
The solution: Optimize staffing with proper planning and training
Plan well in advance by hiring and training seasonal staff early and cultivating relationships with staffing agencies to ensure a reliable source of work. Be sure to increase operational flexibility by cross-training employees so they can cover for someone else when they call in sick at short notice. Just be wary of overworking staff—something predictive scheduling can help with.
Predictive scheduling is where you give employees advance notice of their schedules. By doing this, they can better plan their lives and commitments (side note: many states mandate predictive scheduling).
To help create these schedules, invest in employee scheduling software. These tools let you optimize schedules so you’re not over- or under-staffed during peak times and prevent burnout.
Customers have higher expectations for timely order fulfillment during the holidays. If not managed correctly, these expectations can strain operations and lead to disgruntled customers.
The Solution: Manage customer expectations and streamline workflows
While order accuracy and prompt order fulfillment should always be a priority, it’s wise to first manage expectations around this during the holiday season. Explain that orders may take a tad longer than usual to arrive.
Many customers will be understanding of this. Plus, by informing customers in advance, they can plan ahead to make sure they place orders well ahead of time.
From there, look at methods to streamline workflows for faster order fulfillment, including:
- Following lean manufacturing principles to optimize processes and reduce waste. For instance, by focusing on the principle of continuous improvement, you can asses current processes to identify bottlenecks and inefficiencies during busier periods.
- Implementing warehouse automation for repetitive tasks like order picking and packing. For example, you can use robotic picking systems like those used by Amazon or automated labeling and tagging systems.
- Using inventory management software for real-time inventory tracking to speed up order processing. For instance, correctly tagging and tracking items with proper systems lets you quickly check item availability. You can also configure the system to automatically reorder when stock reaches a certain level so you always have enough stock on hand.
Quality control can be challenging but becomes harder when there’s pressure to fill more orders quickly. It ends up being a balancing act between speed and quality.
The solution: Implement quality control systems
Implement rigorous processes and systems to maintain quality. For example, you can set up a barcode scanning and verification system:
- Initiate a barcode scan when an item arrives in the warehouse.
- Conduct intermediate checks at key points like packing and picking.
- Conclude with a final verification: cross-reference scanned information against order details.
With a solution like Fishbowl, teams can build custom QA and QC steps into your workflow and assign them to specific people. Workflows can also be set up to notify management to monitor and test products regularly, identifying potential issues before they escalate. Adding processes like these can create new and effective work processes that will increase efficiency.
It may also be wise to have the support of a centralized inventory management system for data capture, tracking, and automation. You also want to track key KPIs to ensure products meet quality control standards before shipping. Two important production planning KPIs to track include first pass yield (FPY) and scrap or defect rate.
Finally, don’t forget to train staff to follow quality procedures consistently. For example, offer comprehensive training programs that cover everything from what the safety procedures entail to how to use specific technology. Alternatively, conduct simulation exercises that mimic high-pressure environments so staff get used to operating under pressure.
Safety can easily fall to the wayside during all the hustle and bustle of shipping orders. The hustle and bustle, in turn, also means there’s a higher risk of accidents happening in the first place.
Solution: Prioritize safety
Odds are you already have strict safety protocols. If not, develop these, capture them in an employee safety manual everyone can access, and communicate and train employees on these processes.
For the holiday season, you’ll likely just need to revisit these processes by conducting pre-season training so they’re fresh in everyone’s minds. This could involve revisiting :
- Fundamental safety procedures like proper lifting techniques and correct use of safety equipment.
- Proper equipment operation, like how to operate a forklift
- Warehouse layout so staff know where emergency exits and fire extinguishers are.
Then, when the holidays arrive, keep safety top-of-mind by incorporating reminders into daily briefings, meetings, emails, and even digital signage. Don’t be afraid to incentivize the workforce with rewards and even holiday bonuses for constantly adhering to the protocols.
The holidays are a demanding time of the year as warehouses grapple with everything from trying to predict demand and tackling staffing issues to dealing with often unrealistic customer expectations and attempting to avoid workplace injuries.
But you can succeed by taking a strategic approach to overcoming these challenges—whether that involves using proper forecasting techniques, optimizing existing warehouse space, implementing quality control systems, or keeping safety top-of-mind.