Santa runs a lean, mean, fulfillment machine—he must if he wants to meet the global demand for presents on Christmas Eve when potential supply chain and logistical problems can stack up like a toddler's wooden blocks. Not only are his workshop's shelves stocked with everything from video games to candy canes, but all his inventory loads out at the same time on one sleigh. And talk about on-time delivery—every single present is marked for overnight delivery!
If you find yourself facing fulfillment challenges for the peak holiday season, make sure the key players in your business are as quick and nimble as Santa's workshop staff.
Santa Claus (Owners, Founders, CEOs)
Santa's the one holding the reins for his company, literally and figuratively. If there are any issues with his delivery services, the buck stops with him. The same is true for the leadership of your business—if they don't do their job right, the effects will be felt through the entire pipeline. Just like Santa, owners and managers should use demand planning to shape their holiday season strategies. Two key areas to focus on include inventory tracking and using historical data.
The main goals of demand planning are to make sure you have the inventory your customers want—no more and no less—and the means to deliver the products they want when they want them. Since you don't have an army of elves to help you out, employing real-time inventory tracking is an ideal way to manage your inventory.
Let's say you've picked up on a trend and now, everywhere you look, people are adopting guinea pigs instead of the traditional cats and dogs. Since you already offer small pet products, you decide to sell subscription boxes for compact critters to tap into this growing market. But before you can start shipping those itty-bitty bundles to your customers, you need to locate all of the items in your warehouse.
But you're not worried since you're using inventory management systems (IMS) with real-time tracking. The auto generated report you ran in the summer revealed that the tiny bowties were buried under the XL dog crates in your warehouse, so you moved them to easy-to-access bins. The software automatically sent you an alert when your levels of guinea pig chew toys were running low and you've already contacted your supplier to replenish your stock. Santa would be proud.
Using 2021 Data Insights to Make Adjustments for 2022
You might be asking yourself if the data collected from 2021 is relevant for 2022—the best way to find out is to compare your data with industry data and insights to get an idea if your 2021 data is representative of and applicable to 2022.
Let’s focus on a common metric—top selling holiday gifts. In 2021, one of the most popular gifts was the iRobot Roomba 694, so if you intend to sell more this year, you can review your data to see if you had enough on hand for last year. If you did, then your data last year could let you know how many you should stock this year. If you had too many on hand and had to offload them at a discount, then you know you need to tweak your formula for better performance this year.
It’s also wise to check to see if there are new releases for 2022 and if competing products could be a factor. You could offer coupon codes, sell accessories, or offer additional items to accompany the Roombas, like mops or cleaning products. If you sold your entire stock of mops last year and anticipate selling the same amount this year, then it’s apparent you need to stock more of them to go along with your plans.
Even if you don’t sell Roombas, there are ways to use these insights for your products. For example, what items do the experts predict will be top sellers this year? Are they items you sell and/or your customers want to buy? One item that could be popular in 2022 is 14K gold hoop earrings. So if that’s what you sell, scrape your data from last year to estimate how many pairs to buy. If you sell clothing, makeup, or jewelry, find a way to connect your product to the earrings. This can be as easy as letting your customers know that these earrings are going to fly off the shelves and encouraging them to gift your items to their friends or family.
Head Elf (Warehouse / Floor Manager)
Just like Santa’s workshop, the warehouse is the nerve center and the warehouse manager is the brain that manages the network, relaying information across the entire operation. This multitasking go-getter oversees the receiving, storing, picking, and packing activities to ensure inventory accuracy and maintain standards throughout the ecosystem. While the warehouse manager supervises all aspects of the facility, two of the most important areas are organizing and optimizing the warehouse space and labor.
The goal of successful warehouse organization is to optimize space to create a productive and efficient environment—and the manager must generate a finely-tuned layout with the resources on hand. In Santa’s workshop, the head elf is in charge of finding the best pick paths for his Elfin workforce so they can find and procure inventory quickly and easily.
When managers organize the layout in their warehouse, they must juggle factors like finding dedicated space for fast-moving inventory and setting up a system so staff can find things quickly. The manager must also find ways to store bundled items in one area to prevent workers from walking through endless rows of poorly labeled shelves trying to find the small box of crayons included in a child’s artist kit. It only takes one deficiency or misstep to throw off the entire fulfillment workflow. Warehouse managers are ultimately responsible for customer satisfaction and the company’s profitability, and it all starts at the loading dock.
Let’s be real—warehouse managers can’t pay their staff in candy canes nor can they violate local, state, and federal labor laws by forcing staff to work 140+ hours a week if they want to maintain a safe and sustainable workplace. A 2018 audit of Santa’s human resources files revealed that not a single elf has taken PTO—ever. And the effects of poorly trained temp workers during the ‘64 breakout of the Elfin Flu reverberate to this day.
If warehouse managers don’t hire and train the right staff, ignore safety standards, and pay poor wages, the best layouts and coolest tech in the world won’t bridge the gap to make a company profitable and successful. If a manager is looking to ramp up fulfillment during the holiday season, they might need to bring on temporary staff; it’s a good idea to connect with finance to make sure there is the budget to bring on new staff and the bandwidth to train them properly. And with low unemployment levels, managers must offer competitive pay to attract temp workers.
In addition, managers might want to explore automating tasks to save time wasted on manual processes. Automation also provides opportunities for workers to gain new skills, explore advancement in the company, and avoid injuries. Provide your staff with mobile scanners to automate picking by SKU, and an inventory management system to reduce errors caused by missing or misplaced inventory. Get feedback from your staff about what’s working (and what’s not) in their current process and where they see ways to automate tasks. And for the love of Santa, leave those spreadsheets behind to avoid money being wasted on returns, expedited shipping, and stockouts.
Rudolph (Director of Outbound Logistics, Ops Manager)
Most of us know Dasher and Dancer and Prancer and Vixen, Comet and Cupid and Donner and Blitzen, but if you need inspiration on how to run outbound logistics, look no further than the most famous reindeer of all. With his nose so bright, he’s a paragon of order fulfillment, packing, shipping, and delivery solutions. Directors of Outbound Logistics and Ops Managers are the polymaths of the supply chain and tasked with anticipating obstacles and resolving bottlenecks to ensure all KPI expectations are met. While they have a hand in every pot, two key areas of concern are order fulfillment and transportation.
You are a genius—you’ve just found a buyer for those 300 luxury indoor cat condos you bought at wholesale. The CFA International Cat Show is next week and the vendor needed them yesterday to set up her booth early. Problem is, you’ve been storing them at your warehouse in Bangor, ME and the show is in Houston, TX. This wouldn’t normally be a problem, but to seal the deal, you guaranteed overnight shipping. Chances are you don’t have a private plane on standby, so now your only option is rent a truck and drive 250mph to get those cat condos there on time.
If brands want to build and maintain a stellar reputation for excellent customer service, the Logistics and Ops Managers must have a streamlined, efficient, and agile order fulfillment workflow. We all know the adage of the customer is always right, but in this case, customers have more power than ever; one error and they are out the door.
Even if you’ve mastered order fulfillment, there will be times when customers need to return items. As long as your return policy is clearly stated, easy, and stress-free, you can keep your customers happy. In fact, inconvenient and cumbersome returns policies deter 80% of shoppers and get you put on the naughty list. Loop Returns offers an exchange-first returns platform for scaling Shopify brands and it’s a win-win for customers and brands. There are also companies that offer sustainable and green returns options, something that many young folks are looking for.
Obviously, the best solution is to prevent as many returns as you can, so Logistics and Ops Managers should search high and low for ways to implement automation throughout the system. Order management software, like Extensiv Order Manager, automatically tracks inventory levels, orders, and sales and offers features like order orchestration, automated replenishment, and the ability to auto-generate purchase orders. Automated logistics provide an accurate record of your inventory to provide you with real-time, constantly updated metrics for every new sale or shipment to help you avoid stockouts and duplicate SKUs.
It’s often said that Santa’s sleigh runs on children’s wishes, but chances are your transportation options need actual fuel. Rudolph manages worldwide, overnight delivery with his team of reindeer (and we’re guessing some kind of gravity-defying, magical sleigh that can hold a ton of freight yet remain compact and agile enough to traverse through the stratosphere). Sadly, the earth-bound director of outbound logistics is constrained by the laws of physics and unable to bend space and time, so they must rely on traditional, pedestrian modes of transportation to manage carrier capacity.
While every weak link has the potential to break the supply chain, carrier capacity management is the last inch in last mile delivery. It’s like pairs skating—partners can nail their throw jumps, lifts, and twists, but if the death spiral goes wrong and sends the female skater into the stands, they can kiss the gold medal goodbye. Carriers’ capacity can be crippled by factors like limited driver availability, supply chain breakdowns, demand surges, and increased costs due to inflation.
To avoid delivery derailments, logistics directors must be able to anticipate delays, find ways to combat fees without compromising standards, and offer customers faster shipping (and honor those promises to avoid complaints). This is challenging—even the biggest carriers are having to tweak their shipping practices in 2022. The USPS has ended its postage reselling program and added an additional day to their delivery times. Also, the money back guarantees and refunds for late deliveries that FedEx and UPS suspended during the pandemic have not been reinstated.
While it’s challenging, it’s not impossible to keep your deliveries from going off the rails. Some shipping apps help ecommerce brands auto assign labels, automatically allocate orders to carriers, and automate pushback. Orderbots can also be used for things like assigning shipping types based on the weight of the order as well as placing holds on certain inventory. Brands can partner with a 3PL and 3PLs can build out their 4PL network to maximize efficiency in geographically distributed fulfillment—you can check out Extensiv’s Fulfillment Marketplace for a one-stop hub where you can find verified and vetted 3PL warehouses that meet the unique needs of your business.
Some Final Words from Santa …
If I can deliver billions of presents to 500 million+ households in 42 hours, with only 300 microseconds for each delivery, surely you and your team can vanquish all of your holiday season fulfillment challenges. All you need is effective inventory and order management, an optimized warehouse layout, a well-trained workforce, and a pinch of automation. And don’t forget to leave out cookies and milk for me. Happy Fulfillment!
Download our infographic: Santa’s Lean, Mean, Fulfillment Machine
Check out our whitepaper, Fulfillment Automation Guide: How to Keep Pace with the Speed of Ecommerce and Customer Expectations, to see how automation can help brands with their fulfillment strategies.