Is Your Supply Chain Ready for the Holidays?

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Is Your Supply Chain Ready for the Holidays?

08/25/2014
Doug Pasquale, senior vice president of supply chain solutions for Ingram Micro Mobility, shared with Apparel magazine his insights on supply-chain strategies ahead of the crucial holiday season. 

1. What are your top three best practices for pre-holiday logistics planning?
First and foremost, have a dedicated holiday supply chain strategy put in place at least six months before the holidays. It's always a good idea to begin planning immediately following the previous year's season and engage manufacturers and logistics partners as soon as possible.

Second, embrace the idea of using your supply chain as a competitive differentiator. A fine-tuned supply chain can be the holiday hero for any retailer as it allows for easier adaptation to volatile swings in demand and faster, guaranteed product delivery to reduce stock-outs. Finally, don't cut corners with the returns process. Not only will this improve customer experiences and, ultimately, customer satisfaction and loyalty, but a well-designed returns process can also better support the bottom line.

Returns are simply a cost of doing business, however with the right returns supply chain strategy, you can create a better customer experience (driving customer loyalty and repeat business) as well as drive incremental value from the returned products by processing them quickly and making them available for sale back into retail or into alternate channels.

2. Holiday supply chain disruptions are inevitable – whether it's a natural disaster or a sudden shift in consumer demand. In your opinion, how much stock should retailers put in demand forecasting and planning?
There will always be situations that arise causing disruptions in a supply chain — you cannot plan for every possible scenario. I am a big advocate for sophisticated demand forecasting and planning, but retailers should also bear in mind they don't have a crystal ball.

Big data and analytics tools to help with data visualization and inventory management can help to solve some of this guesswork, but I would place equal weight on running an adaptable supply chain strategy. First build a foundation that is flexible and then layer on predictive analytics on top of that in order to prepare for the ideal situations, but then have your safety net in place should something go awry and you need a Plan B quickly.

3. What advice could you give apparel retailers at the holidays based on your experience working with mobile device retailers?
The mobile device retail industry isn't as removed from the apparel industry as it might seem at first. Both industries are at the mercy of quickly changing consumer demand, and overseas production is common. However, the mobile device industry tends to move at a faster pace – while most retailers change their stock of clothes by season, mobile device retailers are flooded with new technology weekly.

While the apparel industry might not move at the breakneck speed of the mobile device industry, apparel retailers should still err on the side of caution when it comes to holiday supply chain logistics. Ensure laser visibility into supply chains to avoid crowded or even closed ports, and continuously communicate with manufacturers, suppliers and logistics partners to avoid dreaded supply shortages.

4. With only 26 days between Black Friday and Christmas this year, how does this affect supply chain planning and strategy?
The peak season always puts a crunch on supply chain planning and strategy, but when faced with less time to orchestrate all the activity happening between manufacturers, suppliers and logistics providers, a shortened season leaves little room for error. Even one or two fewer selling days during the peak season can have a potentially negative financial impact in retail if not prepared, so it's imperative for retailers to open early, clear lines of communication with manufacturers and logistics providers for demand forecasting, inventory needs and delivery dates. Timely communication and information flow is absolutely critical.

While it's impossible to predict conditions such as severe weather disrupting shipments or massive swings in demand, there are factors well within a retailer's control that should be accounted for with time to spare. Retailers that don't account for the shortened time period will operate with a more rigid supply chain, which does not allow companies to quickly react to unexpected events, scale supply up or down, or expedite deliveries. With a rigid supply chain, retailers run the risk of losing out on peak season spending and potentially even damaging their reputation, which could hinder next year's holiday purchasing.

5. Where should retailers be on their planning trajectory at this point in the year, and what should the next step be?
Ideally, retailers should have begun their peak season supply chain preparations back in January when cycles were set for the remainder of the year. That is the time to start forecasting demand and working with manufacturers to strategize product portfolio, market demand, stocking, and returns preparation. By this point in the season, retailers should be fine-tuning any adjustments to that strategy and should be well under way with executing it. Retailers currently should be firming up delivery schedules and finalizing promotional packaging designs, special deals, and production schedules to ensure they are ready for the coming busy peak season.