By Rick Rover, senior vp of operations, Streamlite
When customers open their holiday purchases this year, most won’t think about the supply chains that produced and delivered their gifts. But, those of us in logistics know that the impact of efficient product flow and management–from manufacturing to delivery–is more important than ever during the holiday season.
The cost of satisfying an unhappy customer is far more expensive than the original product cost or associated shipping cost. Failing to deliver on a promise can lead to a loss in consumer loyalty, and the chatter of disappointed customers via social media and other channels can be damaging to your brand.
What’s more, satisfying a customer whose shipment has been lost or damaged often means reshipping the item. Having to reship an order in June means added costs; in December, it can mean survival. Simply put, it costs less to do the job right the first time.
With that in mind, here are five tips to prepare for an efficient holiday shipping season:
1. Look for delivery partners that can customize services.
The holidays stress the system: Increases in order volume; unpredictable consumer spending; reactionary inventory strategies; inclement weather; and, sometimes complex end-consumer delivery, all have the potential to diminish efficiency. Keep things running smoothly by partnering with your providers to customize service offerings.
For instance, you can increase efficiency by sharing processes and eliminating redundancies. If you weigh packages prior to shipping and your delivery partners weigh the packages again, unnecessary work results. Integrate with your carriers to ensure labeling, weighing, and other processes are being done by just one party.
You may also want to customize physical pick-ups to increase efficiency. Consider asking your delivery partners: Can we schedule extra shifts? Implement weekend pick-ups? Stage trailers on our docks? A good delivery partner should have the flexibility to customize procedures that meet your company’s needs.
2. Talk to your delivery partners early and often.
Capacity becomes a real issue during the holidays, and with the capacity reductions resulting from the recession, this year could be even tougher. Carriers will often protect capacity for their regular high-volume customers.
For this reason, many companies begin projecting holiday volumes as early as the third quarter so they can reserve space with their delivery partners. The sooner companies reserve their projected volumes, the better.
Beyond confirming capacity, be sure to leave the dialog open throughout the shipping process. Schedule weekly calls with your delivery partners, and increase frequency to daily calls toward the end of November and beginning of December. Conversations must continue–even after orders are placed and shipped.
Communicate with your partners when things are going well, and especially if you encounter delivery problems. Merchants and their delivery partners must work seamlessly for customers’ interests to prevent a loss in consumer loyalty and the associated revenue.
3. Make sure the box fits the product.
As simple as it sounds, we often see retailers become so busy during the holidays that they grab the nearest box available instead of the right box for a given product. We’ve seen a flash drive in a box large enough to fit a basketball, and one pair of shoes placed in a box that could fit four.
This is a costly mistake, as big boxes may ship at the dimensional weight rate instead of the actual weight, adding unnecessary costs to the transportation and delivery end of the supply chain. (And, with both FedEx and UPS changing the dimensional weight factor early next year, you can’t afford to be careless here.) Monitor your production line, and quality check along the way to ensure the product/package combinations are appropriate.
4. Work with your delivery providers to ensure the shipping process is transparent.
Supply chain visibility is key–especially for retailers and their customers during the holidays. If merchandise is out of stock, knowing when additional inventory is expected to arrive enables retailers to tell shoppers when to return.
Visibility also lets consumers to track the delivery progress of packages, limiting the number of customer service concerns and reshipments. Select delivery partners that provide tracking and visibility to reduce costs and increase customer service scores and perceptions.
5. More equipment doesn’t necessarily mean higher efficiency.
During the holiday season, retailers can run behind on production schedules and request more trucks to be staged on their docks. But, more trucks on your dock mean fewer trucks on the road.
It’s best to work with the number of trucks you originally requested rather than asking for more. Unnecessarily increasing equipment needs strains the system and slows delivery.
With these tips in mind, let’s kick off a happy, healthy, and efficient holiday shipping season.
—Source: MCM Weekly Nov. 8, 2010 (www.multichannelmerchant.com). Rick Rover is senior vice president of operations for lightweight package delivery provider Streamlite and cofounder/designer of Streamlite’s national distribution network.