Peak Season Inventory Management & Fulfillment Strategies

Peak Season Inventory Management & Fulfillment Strategies

Warehouse during peak season

Brace yourselves – peak season is coming. Or it’s not. We’re not sure what you sell on your e-commerce platform, and peak season is different for every industry. Electronics and gift retailers hit their numbers during the holidays while sporting goods vendors might get volume spikes in the spring or beginning of summer.

Whenever your peak season comes around, you’ll need to be ready for it. That means planning ahead, isolating weak points, and ensuring your warehouse workflow is running smoothly and scales to meet demand. But what does all that mean for your business? Let’s dig in.

Lean inventory is not an option

Lean inventory systems are essential to reduce unnecessary cost and waste in a warehouse throughout the year. It’s how small businesses are able to compete with corporate giants, and it’s how you’re able to achieve profitability without exhausting your cash flow. But to get through your busiest season, we may need to throw all that lean methodology out the window. Instead, you’ll need to order more than you might need… because you might need it.

It’s critical that you measure your sales trends as they change. It’s not enough to look at a monthly average volume, or a time period between restocks, and call that good. Your daily average sales might look completely different in the winter versus the spring, and you won’t catch that trend shift if you’re looking at monthly sales or comparing this year versus last year in any given range. Find the spikes and curves in your sales and calculate when you’ll see them again. Then order accordingly, keeping lead time and lead time demand in mind.

To learn more about inventory forecasting, check out SKULabs Academy’s guide

Just to clarify, we’re not advocating a “just in case” approach. Ending your peak season quarter with too much surplus inventory is just a way to start your next quarter off on the wrong foot. Instead, gauge your confidence level in your demand calculation for the upcoming peak season. Are you 95% sure that you’re ordering and stocking the correct amount of goods for the upcoming volume spike? If so, add the remaining 5% as safety stock to the order. Adjust according to your confidence level with each purchase.

Build an all-day fulfillment process

Warehouse order fulfillment

Due to variances in order volume and the need to complete other warehousing tasks, most e-commerce businesses don’t have dedicated fulfillment staff. Instead, their warehouse team juggles their order fulfillment needs with other tasks, such as customer service, inventory counting and receiving, and returns processing. However, when order volume spikes up, a part-time order fulfillment process may not be ideal.

Most warehouses base their daily fulfillment around the estimated pickup times for their outbound packages. If you can get through your daily average order volume over four hours of picking, packing, and shipping orders, you’ll likely allocate four hours for that task before the pickup time. But racing to beat the pickup time doesn’t cut it during peak season, when your daily average order volume is at its highest.

Instead, try to dedicate at least part of your warehouse team to full-time order fulfillment. Complete order security checks, address checks, and other clerical work in the morning before clearing orders for fulfillment. Then, your fulfillment team can have the whole work day (or at least most of it) to pick, pack, and ship the day’s orders. This should allow time to handle your increased order volume before the pickup truck arrives.

Keep an eye on delivery times

As we said in the beginning of this article, we don’t know when your peak season is. Maybe it’s in November and December, as shoppers scramble to find the perfect gift for a special someone. Maybe it’s near the end of spring, as summer sports seasons kick off and athletes need to get geared up. In either of these examples, and many others we can think of, your buyers will expect their orders to arrive in time for the reason behind the season. Depending on what’s driving your sales spike, delivery time might be key.

There are a few simple ways to ensure that delivery deadlines are met, even during the most hectic busy seasons. First and foremost, modern shipping software solutions (like ours) can compare shipping methods, postage rates, and estimated delivery times. Once you have those estimated delivery windows, ensuring that the delivery occurs on time just boils down to common sense and execution. Is the projected delivery window cutting it close for the customer? If so, switch to a guaranteed delivery service (typically a 2-day or overnight air shipping method) and make sure those orders are picked and packed first to be extra sure that you don’t miss the pickup time. Has something gone wrong and the desired delivery time isn’t possible? Let the customer know ASAP rather than trying to force a fulfillment option that isn’t likely to work out in their favor.

Learn from past peak season mistakes

Ultimately, peak season preparation is about both foresight and hindsight. While it’s critical that you plan ahead when it comes to stocking up on inventory and getting a fulfillment process in place, that isn’t all there is to surviving a sales surge. If you know that peak season is coming, you should know what went wrong last season. If you know that, then you know what you need to fix this year.

As we move our business forward, we must always be able to look back and diagnose what didn’t go as smoothly as we would have hoped. An e-commerce warehouse operation has a lot of moving parts in it, and it’s easy to get lost in analysis of all the pieces together. That’s why it’s important to isolate the fundamental components to see what needs to be improved. If your team was missing pickup times, you know you need to allocate more working hours to picking and packing. If you oversold (or overstocked), you need to adjust your purchasing this time around. With the right data in place, you have everything you need to make this peak season your best ever.

If your peak season was rough last year, take steps to make sure things go more smoothly this time around. Ask the SKULabs team to see what else we can help your warehouse with.