Although Christmas and Black Friday are indisputably the biggest dates in the retail calendar, smaller events such as Easter and Mother’s Day can have an outsized impact right through the supply chain in certain industries. Compared with the roughly 120 million chocolate bars sold in New Zealand over the course of an entire year, the 40 million chocolate eggs bought by New Zealanders in the lead up to Easter Weekend can be a major pressure on chocolatiers’ supply chains. Whenever your business is expecting a spike in sales, here are some top tips to manage seasonal inventory pressures.
Understand Seasonality in Your Business
If demand is spiking at similar times every year, there’s no excuse not to identify why. If your business is capturing regular or, better yet, real-time inventory levels, it should be straightforward to work out when sales are at their highest. If your business is still not capturing real-time inventory data, consider investing in inventory management or food manufacturing software that makes it easy; being able to undertake a granular assessment of sales and inventory data means you should quickly recoup the small investment to upgrade.
Once you’ve identified the seasonal events, such as Easter, that broadly affect your business, turn your mind to specific products that move much more quickly at these times. A wholesale bakery, for example, would expect reasonably steady demand for bread and a sharp spike in demand for hot cross buns in the lead up to Easter. Again, food manufacturing software can help you identify these standout products.
Ordering Enough Inventory
If you’ve got several years of past inventory data available, you should be able to use inventory management or food manufacturing software to produce a reasonable forecast of demand for the upcoming holiday season. Once you’ve determined how much inventory you need, consider ordering ahead. Even businesses that usually operate a lean supply chain sometimes order in safety stock to ensure they get through a busy period. Taking the risk of having a small amount of excess stock at the end of the season is often much more palatable than enduring a stock out during one of your business’ busiest periods.
Taking Care of Transport
If everyone in your industry experiences seasonal increases in sales volumes, this can have a flow on impact elsewhere in the supply chain. Particularly, seasonal pressures can often increase the cost to fulfil and ship orders. If availability of transport could be limited, look at securing cargo space in advance.
Gear Your Warehouse For Efficiency
In the rush up to a major holiday or event, there’s often no time to waste; every staff member should be operating at maximum efficiency. For particularly seasonal products it can be sensible to hold any safety stock in an out of the way location in your warehouse, or even in a secondary storage location. However, as the seasonal peak approaches you should consider realigning your inventory to reflect seasonal demand. Seasonal inventory should be easy and quick to pick, pack and dispatch so that you can keep pace with increased order volumes.
The first week back after a holiday is the best time for manufacturing and distribution businesses to start preparing for the coming year’s seasonal pressures. An early response could be the difference between a stock out and a successful holiday season. As a starting point, why not consider whether inventory or food manufacturing software can help you get on top of the game?
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.