As we get further into the summer months, supply chain companies, those who deal with cold chains in particular, need to prepare for potential influxes in demand, leading to a greater need for capacity optimization. In this blog, we will look at ways that both individual operations, and those within a larger network, can optimize capacity and improve scalability during the summer months.
Key Takeaways:
- A number of factors, including weather and traffic, can affect demand during summer.
- Capacity optimization begins within your own facility, with many simple changes making big differences.
- Communication and data sharing is key when dealing with a larger network of partners.
What is Volatility and Seasonality?
The supply chain industry is one of constant change. Increases and decreases in demand come and go throughout the year, and can be caused by a number of predictable and unpredictable factors. These factors can include:
Seasonal Demand Shifts
As the temperature rises, so too does the demand for summertime items. This shift in demand is, for the most part, predictable through the utilization of historical data. This influx in volume will create a greater need for capacity in operations that deal with these kinds of products. However, through thoughtful planning and forecasting, you can be better prepared well before you begin to see volumes actually rise, allowing you to transition more effortlessly into the busier season.
Weather Conditions
Warm weather means that temperature-sensitive products will need to have greater care taken of them in order to preserve their integrity along the supply chain. Freezer and cooler space will need to be greatly optimized so as to reduce spoilage and lost product, which lead to order shorts and decreases in customer satisfaction.
Cold chain optimization will require a greater focus during the summer months as not only storage within your facility will see an increase in demand, but the need for refrigerated vehicles will also increase. Proper training, technology, and scheduling will be crucial when dealing with refrigerated distribution during these seasons.
Traffic Increases
Travel becomes a more frequent occurrence during the summer months, and therefore traffic increases. Not only does this present the possibility of delays, but it also increases the potential for collisions. This can lead to assets being held up, causing a bottleneck in some areas of your operation.
Summer Vacations
During the summer months, staff will be taking more time off to enjoy the nice weather. This can potentially leave you with fewer warehouse staff to fulfill orders, but also fewer drivers to deliver your inventory, leaving you with less capacity overall. This is a crucial factor to prepare for, as missed, late, or shorted deliveries can lead to a severe decrease in customer satisfaction and affect your profitability.
Capacity Optimization Within A Facility
When wanting to optimize for increased demand and capacity requirements, the best place to start is simply with what you have at your disposal. An initial walkthrough of your warehouse can illuminate a number of areas where potential space could be made available. Some initial ways to increase capacity in your warehouse can include:
Walk Through
Taking a simple walkthrough of your facility is a great initial step to see if there is any under-utilized space available that may have been overlooked.
Also, ensure the organization and cleanliness of your facility. If there is an overflow of inventory in the middle of an aisle or important pathway, this creates a bottleneck and increases wasted time while decreasing efficiency.
Racking Upgrades
Racking can be improved both by upgrading your physical racking itself, but also by optimizing your racking, put-away, and picking processes. When changing your physical racking, take into account any potential vertical space that could be utilized as well. This increases your overall capacity without taking up any additional floor space.
Processes
Optimizing your slotting and prioritizing the throughout of your products is crucial. If a product moves in and out of your facility much faster than others, ensure it is easily accessible by your team to eliminate any wasted put-away or picking time. Items that don’t move as quickly can generally be stored in the further away locations.
Maximizing lead-times will ensure you and your suppliers are aware of the inventory requirements necessary to meet an influx of demand. This will also allow for any potential discrepancies to be caught, and rectified, much earlier if they are to arise.
Operating more smoothly is a much better practice than quickly. Ensure the proper adherence to procedure when fulfilling your orders. Cutting corners for the sake of speed will often result in unnecessary mistakes that result in wasted time and lost revenue.
Technology Implementation
Technology can be a great addition to your operation, but it is key to optimize your processes first. Technology can improve upon an already efficient process, but it can’t fix all your problems on its own.
WMS
A Warehouse Management System (WMS) can create a much more seamless connection across all departments and processes within your business, improving visibility and reducing errors. Pairing your WMS with a system of sensors and scanners can provide you with real-time data that can be utilized to make better informed decisions to improve efficiency.
Digital Twin
Going one step further with the implementation of a digital twin, you can easily visualize your entire facility with up-to-date data, allowing you to see any potential areas for improvement with regards to capacity, even making it possible to make changes to your digital facility to see the effects on capacity management before implementing those changes in the real world.
Automation is an additional step up to ensure consistency when it comes to the efficient completion of processes.
Optimizing For A Network
When dealing with a large, or even small, network of partners, it can be daunting to try and organize them into a single unit that are all aligned properly to handle sudden changes in demand and capacity. However, there are ways for those at the center of these networks to better prepare themselves and their network for these changes.
Communication
Communication is key at all times when dealing with a network of partners. This not only includes the day-to-day operations of those within the network, but also disseminating information like demand forecasting to all partners. Each facility can operate in different ways when it comes down to it, however, fundamental processes, information, and contingency plans are all crucial to be shared across the network to avoid disruptions and bottlenecks from arising.
Adopting Additional Partners
Adding more partners to your network creates more available space for your inventory and allows you to make more deliveries with the added drivers now at your disposal.
There are important considerations when choosing to add more partners to your network, such as;
- considering their minimum order rate
- the physical location of their facility
- and the scalability of their operation
You want to ensure that any and all new partners are where you need them to be, can scale appropriately to your protected influxes in demand, and have the right number of minimum orders to ensure that onboarding them will be profitable to you.
Monitoring and Re-evaluation
As we have mentioned, the supply chain is always changing. Processes and technology should be regularly monitored and evaluated to ensure they are still providing the best performance within your network.
During your less busy seasons, it is also important to evaluate past performances during your busy season to see what kinds of preparatory work can be done in the future to better prepare for seasonal spikes in demand. This can relate back to your forecasting, procurement, and distribution processes which should all be evaluated regularly to improve readiness. Once evaluation has been done, communicating any areas of improvement or inefficiency should then be dispersed to the rest of your network as well.
Final Thoughts
Increases in demand, and the need for greater capacity can be affected by a number of factors both predictable and unpredictable. However, there are a variety of ways to better prepare your individual facility, or your network as a whole, for any and all of these influences.
No matter how you choose to optimize your business with regards to volatility and seasonality, communication, technology, and consistent re-evaluation are all key to your success.
Contact Routeique
Are you ready to improve your supply chain’s resilience and adaptability to shifts in demand?
Get in touch with our team to learn more, and stay tuned for our future blogs about supply chain orchestration.
In the meantime, check out our other blogs about orchestrating your network.
