January 18, 2019      3 min read

The peak season is what makes or breaks many businesses, with many relying on big business during certain months to carry them through the rest of the year. A distributor of winter sports equipment, for example, would make most of its sales in the lead up to and during winter, but if it can’t meet this demand through inefficient inventory management it simply won’t make enough money to easily cover year-round fixed costs.

Understanding peak season demands such as during festive periods or industry-specific peaks which may affect inventory manufacturing allows businesses to maximise the amount of revenue they can make in often a very short timeframe. Outlined below are four key factors during peak periods that any inventory manufacturing organisation should focus on to be prepared for any peak season.

Factor in lead times before it’s too late!

Ensuring a stock of supplies in the lead up to a peak season is important as it allows businesses to meet demand which may exceed manufacturing supply. It can be hard however to forecast this demand and ensure that overstocking does not occur. Inventory manufacturing software can create models based on previous seasonal peak demands and include current factors to plan what level of forward inventory manufacturing needs to occur. This forward planning can assist greatly when ordering of raw materials may need to occur from overseas. A business ordering from China, for example, would need to order many months in advance to ensure the materials arrive in time to be manufactured for a peak, there can be further complications to lead time such as Chinese New Year where many factories close for up to a month.

Even ordering locally, suppliers may have increased lead times due to also having pressure from peak season demand from other manufacturers occurring all at once. Forecasting and understanding lead times for is one of the most important steps in inventory management for peaks periods as without raw goods or products to sell, a business won’t make any money or meet increased demand.

Stock up on supplies

Understand lead times allows a business to ensure they have an adequate stock of supplies in advance to meet increased demand due to seasonal peaks. If a business runs out of one raw material key to manufacturing, then the entire supply chain could ground to a halt.

An example of this would be a brewery running out of beer cans during summer. They have lots of the raw ingredients of hops and water however due to inadequate forecasting of supplies an important packaging material ran out, impacting the bottom line. Inventory manufacturing software can forecast demands for all inputs into the production process allowing for forecasts of raw material ordering.

Ensure adequate resourcing

If all of the raw materials are available and the time to manufacture products prior to a peak is there, is the business ready to succeed? Many businesses make the mistake of not forward planning their peak season resourcing. They might delay investing in a piece of technology that could assist in meeting peak supply until after peak season, or not leave enough time to hire and train employees. Forecasts of inventory demand should be analysed to review what level of resourcing will be required to ensure enough lead time for resourcing of people and assets to occur.

Review and adapt

Just because the forecasting has been done a year in advance, doesn’t mean that inputs or factors will not change. Inventory manufacturing and fulfilment organisations need to monitor their forecasting and adapt it for changes to ensure overstocking doesn’t happen. After peak periods have occurred, forecasts should also be reviewed to see how accurately they reflected what occurred and whether changes can be made in the future to more accurately forecast what may occur during a peak period enabling business to further maximise revenue.

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