Now is the time to prepare for upcoming holiday sales with forecasts predicting fewer orders than last year and supply chain and labor shortages to boot. It will be a season of looking for ways to lower costs, especially shipping charges, and perhaps engaging in some soul searching for the strength to get on the other side of it.
If you’re managing online stores, filling orders in person and accepting mail orders, you’re inventory management is probably a mess – unless you’re using inventory management software. You need to know how much inventory you must make informed decisions. If figures vary from one department to another, how do you decide which version is true?
Know What You’ve Got
Before you start manufacturing more product for the holiday season in anticipation of demand increase, learn the truth about what you have on hand, in all your locations and in all stages of work in progress.
Do your math, or at least have someone or software do it for you. Determine how much to order and then reevaluate your workflow stages to adapt as needed.
Finesse Your Ordering Process
How much material and how often you place your order depend on how long it takes for that order to arrive. Your order sizes and frequency are planned so you will have enough time to manufacture goods to fill orders in a timely manner. If the lead times get longer, you run the risk of pausing production, which leads to shortages. When people order online, they expect fast delivery. Backorders can cause order cancellations and drive customers to other businesses.
If you already know your supplier isn’t reliable, do your homework now to find an affordable alternative. When considering that many factors can impact delivery time from having equipment needing repair to a shortage of truck drivers. If you can find a supplier in your local region, finding a last-minute way to get your goods (even if you need to pick them up yourself) is much easier when major routes are closed.
Cut Down on Waste
Running reports to evaluate product performance all along the production line can help to identify waste such as breakage, theft, misplacement or obsolesce. When you uncover a problem, nip it in the bud. You may need security cameras to get to the bottom of what’s going on, but as soon as you do, you might find you’ve already solved your theft problem.
A lot of money can also go to waste on unnecessary shipping charges. Often, FedEx or UPS will overcharge due to issues like zip code errors or accessorial charges. You don’t have to wait for your carrier contract to expire to renegotiate it. Depending on your shipping volume, you might find that negotiating better rates can save you thousands of dollars every month. You can even find consultants who will do the negotiating for you and only charge a fee based on what they save you.
Another way to save money on shipping is to use a drop shipper who likely gets better rates due to the sheer volume of packages they ship.
As we transition from health crises to economic crises, realize this is no time to be complacent. There will always be a new obstacle to overcome and those who ride the waves will land on sandy shores when the weather calms down.
