APICS is the premier professional association for supply chain management.

Making Your Holiday Operations Merry

By Elizabeth Rennie | N/A 2011 | 6 | 11

With the winter months upon us, it's time to intensify focus on strategic initiatives in the areas of retail systems, supply chain and product management, packing, and shipping. Operations and supply chain managers must pay special attention to the processes and systems required to meet availability and scalability requirements__while avoiding disruption to operations and retail sales. 

With this in mind, global advisory and market research firm IDC Retail Insights has released the report "Top 10 Recommendations for the Holiday Season." International head Ivano Ortis and his coauthors write, "Looking at the business outlook for the rest of 2011, there will most likely be more challenges ... Position in the industry will be influenced by how [a business] engages both loyal and new consumers this holiday season."

Ortis says the report illustrates a set of immediate tactics to help organizations better prepare for the holiday season. Some of these strategies include the following:
  • Perform a landed-cost audit of key product lines, and understand how commodity prices (oil, cotton, metals, food) might affect the season. It's crucial to be diligent about monitoring changes and then respond accordingly. With the economy still inching out of the recession, consumers remain sensitive to price changes. Skillful navigation of these dynamics can make the difference between ending 2011 in the red or in the black. The bottom line is to continually improve how well product life cycle costs are managed from a total-landed-cost perspective. According to the report authors, "Audit now and often__ our recommendation would be weekly at a minimum. Make the necessary adjustments to retail prices and to order quantities and allocations to ensure product sell-through and profitability."
  • Run your inventory placement models with the latest assumptions. In the months before the holiday season, consumer demand shifts challenge profitability and revenue targets. To avoid missing business performance expectations, there are several fundamental inventory management processes that should be completed now, including validating current inventory accuracy, evaluating replenishment models, and double-checking order quantities against current consumer demand forecasts. More advanced supply-balancing activities also should be employed to assure higher levels of service this holiday season, thus reducing postseason inventory obsolescence and markdown liabilities.
  • Make sure price and promotion engines can handle the activity you have planned. Unexpected competitor tactics and customer choices will affect sell-through rates and margins, compelling your merchants to make real-time shifts in their own tactics. Success also depends on the reliable performance of systems and processes used to manage and distribute accurate prices and conclude sales transactions with them.
  • Consider shoring up your demand intelligence capabilities with cloud-based analytical services. Temporary use of cloud-based analytical services can be highly beneficial. The authors write, "With their low-cost elastic scalability, these services can drastically reduce processing times__eliminating one obstacle to more accurate and more frequent demand forecasting and replenishment, allocation, and pricing optimization."
Vivian Li, brand manager, online professional seller segment, at shipping solution provider DYMO Endicia, offers some simple packaging and shipping tips to prepare for the holidays:
  • Organize your shipping station so that more popular items are easier and faster to reach.
  • Pre-pack popular items that are shipped on a daily basis.
  • Take advantage of database integration, batch printing, automated customs forms, and other software features.
  • If you ship internationally, simplify and automate forms.
  • Familiarize yourself with and use a variety of shipping products to make the most of last-minute business. For example, the United States Postal Service is the only carrier that will deliver on Christmas.

Whatever product or service your company provides, there are straightforward and proven process, information, and technology strategies to help you make the most of the holiday shopping season. The next few weeks play a major role in shaping the operations and supply chain management industry outlook as a whole. It's no surprise that, in order for your company to maximize its bottom line, it must successfully engage both loyal and new consumers this season.

Elizabeth Rennie is managing editor for APICS magazine. She may be contacted at editorial@apics.org

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