When it comes to the holidays, retail businesses must keep a laser focus on the busiest season of the year. The final months of the year are filled with shipping deadlines, peak shopping days and peak return days. Beyond capitalizing on profits, businesses can get an early start making decisions about stock replenishment, holiday marketing and return communications—all by using the calendar below.1 Print it, bookmark it or download it for easy access in the busy season ahead.
An efficient supply chain is key to maximizing business success, whether a small or large company. When businesses manage their supply chain effectively, they are increasingly likely to boost customer satisfaction, reduce operating costs, and increase sales and profitability.1
By conducting a warehouse audit, a company can likely add efficiency to its supply chain. Regularly assessing your warehouse operations can reveal inefficiencies, help establish sustainable standards, and prevent issues from developing into full-fledged problems.2 Read on to learn how to conduct a warehouse audit, so you can catch problems in their initial stages and optimize for future improvements.3
“By conducting a warehouse audit, a company can likely add efficiency to its supply chain.”
Configuring a Warehouse Evaluation Process
A warehouse audit can be conducted by an internal or external auditor, or by the department itself. Most importantly, the individuals handling the examination must be objective when analyzing past performance and possible improvements.4
When conducting a warehouse assessment, start by collecting both quantitative and qualitative data from key stakeholders in the warehouse, as well as other departments, such as customer service and IT. Be sure to not silo other departments, as they all provide valuable insight and can benefit from understanding the audit results.
After gathering the data, a thorough analysis of data is required to evaluate whether there are any existing inefficiencies or risks. From there, the audit team will produce a warehouse audit report that provides recommendations, risk assessments, and next steps.5
The Warehouse Audit Checklist
It’s important to note that warehouse audits can vary in depth from business to business depending on the extent of operations and the available resources. While it’s beneficial to establish a process that models the aforementioned one, a business with less resources or one that is new to auditing, can benefit by assessing some of the basic items included in this checklist:6
Determine whether storage space is used effectively and that space used for non-storage activities is kept to a minimum.
Ensure that all equipment is in good operating condition and that routine inspections take place. Additionally, evaluate whether equipment is being used to its maximum potential and is not interfering with other operations.
Make sure there are safety and accident prevention policies in place, and that employees and supervisors have a clear understanding of prevention methods.
Check that general maintenance is performed, so that all areas, both internally and externally, are kept tidy and sanitary.
Evaluate the overall efficiency of warehouse operations. Then provide recommendations and actionable next steps.
Another benefit of conducting a warehouse audit is the ability to use the data gathered to create benchmarks to measure against. One of the most critical benchmarks is cycle time, i.e. the time it takes to process an order from start to finish. A warehouse audit should ideally reveal inefficiencies, errors and waste, all of which can reduce cycle time.7
A warehouse audit provides your business with a quantitative and qualitative understanding of the productivity and service levels of warehouse operations. By conducting warehouse assessments, you can identify business progress levels across a wide range of benchmarks, and ultimately help your business to grow and succeed.8
While strong sales are the backbone of a retail or ecommerce business, inventory management can mean the difference between success or failure. Mismanaging your inventory can lead to errors in stock levels, poor quality control and wasted storage space. These problems can quickly percolate and affect your shipping operations; they can slow picking and packing, even allow you to ship incorrect or damaged goods. Keep your business on track by implementing a few important practices.
Categorize Your Inventory
Bring order to your warehouse and add efficiency to your picking process by choosing a way to categorize your products. This will make it easier and faster for you to locate and pull items from your shelves. There are a few common systems companies use. One is called ABC, which groups products by their value, with A being the most valuable items and C being the least valuable. A numerical system takes a different approach by allotting numbers for product classes, individual products and their location in the storage facility.
Establish Minimum Stock Threshold Limits
The minimum stock threshold is the least amount of inventory you need on your shelves at all times. By determining your threshold limits, you can ensure you have safety stock ready to answer a sudden influx of sales. This allows you to meet demand and curb lengthy fulfillment times, which would only upset customers. Use this formula to calculate your limits:
Minimum stock threshold = (Average daily product sales/# working days in the month) x average product delivery time1
Please note: average product delivery time should be calculated in days.
Implement Frequent Quality Control Checks
Keeping an eye on your product quality can help prevent customer satisfaction issues and lower return rates. By keeping returns down, your company can maintain its margins. Do routine checks of your inventory to search for signs of damage. Look for discrepancies in prices and product descriptions; products sizes, colors and styles should be accurate. That way you catch any issues before they hit your customer’s front step.
Implement Stock Check Cycles
Cycle counting programs help you gauge the accuracy of your inventory levels by auditing a small sample of products on a routine basis. That way, you don’t need to spend time checking all your inventory all the time. Decide how often you’d like to do cycle counts. Some businesses take a periodic weekly or monthly approach, others do it at random throughout the year. Stay vigilant about your inventory counts to maintain stock visibility. Without accurate stock information, your customers could place orders that can’t be filled.
Liquidate Slow-Moving Stock
By doing routine checks of your inventory, you can stay abreast of product sell-through rates. Save your company dollars and storage space, by liquidating the products that aren’t moving off the shelves. Bring new products into the fold that share similar characteristics with your biggest sellers.
With a few simple steps, any size business can elevate its inventory process. By categorizing your inventory, deciding minimum threshold limits, keeping an eye on quality control and more, your business could see a wide range of positive effects. With a well-run management process, you could add efficiencies to your shipping operations, shorten fulfillment times, lower return rates, improve your customer service, and, of course, boost your bottom line.
When it comes to the holidays, retail businesses must keep a laser focus on the busiest season of the year. The final months of the year are filled with peak shopping days and peak return days. To help capitalize on profits, we’ve made sure to note 2016’s highest grossing billion-dollar shopping days. Get an early start making decisions about stock replenishment, holiday marketing and return communications—all by using the calendar below. Print it, bookmark it or download it for easy access in the busy season ahead.
More and more customers expect an omni-channel experience. They want the freedom to shop on any channel they choose. They also want the products they love to always be available. To answer these demands, companies have invested in a new fulfillment strategy: Ship from Store. Read on to learn more about today’s consumer mindset and the power of Ship from Store.
Explore some related shipping content.
Consumer expectations are changing faster than ever. To achieve success, a retailer must meet or exceed these needs ahead of the consumer, especially when it comes to shipping costs. For this reason, Ship from Store is one of the most invested in omni-channel opportunities today.1
In the Ship from Store Webinar, guest speaker Brendan Witcher of Forrester Research and Jim McNally of the USPS shared their industry perspective on the popular fulfillment strategy, with McNally focusing on the USPS’ ability to meet Ship from Store needs.
Explore some related shipping content.
Online sales are more important than ever for a successful retail holiday season. Make sure your business is prepared. In this workbook, we show you how analyzing last year’s shipping challenges can help you build a top-notch order fulfillment program for years to come.
Preparing for peak holiday season presents a constant stream of challenges—from ensuring equipment functions properly to training the influx of temporary employees, it takes wisdom and planning to make the most profit in the final quarter of the year. We sat down with Dwayne Black, Senior Vice President of Operations at Shutterfly, to understand just how the website—which turns personal photos into books, holiday cards and gifts—tackles the holiday season. Read on for tips on forecasting stock needs, perfecting inbound and outbound processes and the importance of smooth communication along the way.
How much of your business occurs during the holiday season?
Well over 50% of our revenue comes in the fourth quarter. Our highest volume of orders comes between November 15 and December 20, which is really our peak season right around Thanksgiving and Christmas.
How do you plan and prepare for the holiday season? How do you forecast stock and staffing needs, for example?
Ten years ago, when I started, we started our Q4 planning in June. Now, Q4 planning is a year-long activity, from equipment purchases to workflow improvements. When the holidays are over, we’ll immediately go into postmortems. We’ll evaluate the entire model. We’ll go through what went well and what we can improve. Then, the following year, we’re fixing the things we can improve and augmenting the areas that performed well. It’s a full-year planning process.
During planning, what is the cutoff date for implementing new ideas?
As an online digital retailer, we have a code freeze, so we don’t make any changes to our website or workflows after October. All equipment will be installed and tested before then. Labor-wise, we bring in 3,000+ temporary employees in the fourth quarter to augment our workforce. The fourth quarter is the time of year when everything comes together–we bring people in and get them trained to ensure we deliver the best possible experience for our customers.
What role does your permanent staff play in holiday planning?
Everyone takes part in the employee onboarding process. My team focuses on the supply chain, which deals with the transportation side, and manufacturing which makes sure that the equipment runs and that we have the people in the right places. It all comes back to ensuring we deliver on our 100% customer happiness guarantee.
When it comes to postmortems, what kinds of activities do you do in order to single out successes and failures?
Postmortems are key to our continued success and happen in early January, right after the holidays. Our teams hold postmortems at all of our locations and divide them by department: calendars, holiday cards, personalized stationery, photo books and gifts. Those departments will really dig into areas that exceed expectations as well as areas where we can improve.
There’s one challenge I think every company is being faced with. Black Friday and Cyber Monday create huge peaks of demand. I’m sure it impacts the carriers as well. We work really hard to ensure that we can meet our customers’ needs during the rush.
Are there any tactics you use to increase processing speeds around those dates? Since you have customized products, pre-packaging isn’t an option, but what advice can you give to alleviate those demand peaks?
You’re 100% right, everything we do is custom and on-demand; we don’t pre-package or pre-produce anything. What we can do, however, is make sure our workflows and processes are perfect. It’s not only making sure the processes work and the equipment is running right. It’s also making sure we have the technicians on board so that if something does go wrong and a piece of equipment goes down, we can get it up and running right away.
The other thing is, even in our automated processes, we have backup plans. We always have a plan B and in some cases a plan C and D. We know if a piece of equipment goes down, there are ways for us to produce the product and get it out the door without using that piece of equipment. It might require more resources until we can get things working again, but it keeps our process moving.
So one piece of advice you could give is pre-plan and understand where your potential pitfalls are, have plans a, b and c ready. And the second part is to make sure your staff is properly trained, everyone’s on the same page and knows how to deal with potential risk situations.
One of the things we do internally, we call it the five P’s. It stands for: Prior Planning Prevents Poor Performance. That’s what everybody looks at. You have to expect the unexpected, and stay calm and communicate. If we encounter a challenge, it’s best to admit that there’s a challenge and develop a plan to solve it. It sounds cliché, but communication during peak is especially key. We have multiple meetings daily at all hours of the day; we’re always talking, so that everybody is in alignment.
Do you have that level of communication with all of your facilities across the country?
Absolutely, yes. Communication is not just held within the manufacturing facilities, it’s also with the teams working on the website, engineering and promotions.
With such massive operations, with so many moving parts and people involved, how do you keep that communication clear and how do you keep it from overwhelming the system?
In Q4, we have people in each department who are the communicators. You can’t expect a production manager on the production floor to be sitting in meetings all day and managing a workforce. We provide updates as needed so that we’re not inundating our workers.
Let’s change gears and tap into the subject of stock and inventory during the holiday season. Shutterfly has tons of SKUs and a ton of different product offerings. How do you organize your inventory to make it more efficient for processing, picking, packing and shipping?
It’s twofold. If you look at it from a floor perspective, we have what we call “supermarkets.” With raw materials and supplies, we have a visual factory in our locations. Everything is in its place, so you can easily look at it and determine if anything is low on inventory. We also have backup stock in our facilities. Nine months out of the year, I can keep everything I need to run our business within our own production facilities.
When we get into the fourth quarter, it’s all about planning. Our teams are really focused on creating a strong supply-chain strategy. When we get our forecast from our revenue teams, we’ll go through and extrapolate what we need for raw materials. We also calculate scrap, damage, etc. The worst thing I could do in the fourth quarter is run out of paper.
Everyone thinks, “Ok, just make sure you have enough paper,” but that’s easier said than done. People don’t often realize it, but paper is perishable; it has a certain moisture content to it. If you store it in a dry area, it’s going to dry out and it’s not going to print or cut as well. There’s a lot of planning that goes into the process. It’s a very orchestrated model. You just have to manage all the raw materials.
Do you have strong communication with your suppliers and your carriers?
We absolutely do. We know that our partners need to plan out their supply chain as well. For our carriers, we know they need to figure out how many trucks they need on the road, how many drivers to staff, etc. It’s a major orchestrated effort.
In terms of the shipping and carrier component, when do you start talking to the carriers about the holidays?
We give our carriers forecasts as soon as we can. We understand that they need to build their platform internally as well, and we give them a hard commitment of what we think we will be shipping about 3 to 4 months before the season.
It seems like you’ve figured out a way to manage all the obstacles that come with the holidays.
It’s a beautiful thing when everything comes together. When you’re shipping those packages, you’re making a lot of people happy. They’re not just ordering everyday staples. Everything we send out is customized and personal. Sometimes it’s Christmas cards and sometimes it’s a photo book from a special vacation. All in all, it’s things that make people smile and how we share life’s joy.