2024 is the year that makes you choose: do you meet your customers’ expectations or contain costs? The struggle is real. Use this peak season guide to escape peak pandemonium in your warehouse.
In a new peak season report from Industry Dive and Deposco, 77% of supply chain leaders anticipate Peak 2024 to be more challenging than last year.
What can Warehouse Managers expect in Peak 2024?
- 35% of the survey participants view inflation and a declining economic outlook as the most concerning national or global issues impacting peak season.
- Over half of the leaders are focused on tight budgets for supplies and services, reliable access to goods, decreasing demand, and increasing returned products.
- Fulfillment centers in all industries will see a continued labor crunch for permanent workers inside and outside the 4 walls.
- Over half of executives will address these issues by hiring additional labor; 41% will invest more in recruiting; and 32% will ask existing workers to commit to overtime to cover for volatility.
- To top it off, peak season confidence is at an all-time high in 2024, with 93% feeling confident they’ll be able to meet customer expectations. Despite the high confidence level, 37% also identify “rising customer expectations” as a top concern for peak season.
When you dig into the data, respondents may be over-zealous and may not have their fingers on the pulse of their customers. As the data reveals, there are always blind spots.
“Navigating Peak Season 2024: Confidence Soars, But Are Cracks Beginning to Show?”
Discover the top lessons learned, strategies, and technologies that will help you better anticipate, operationally align, and deliver what customers expect – while keeping the lid on your costs.
In 2024, customers will expect fair prices and problem-free execution. When proper preparations are not in place to align operations with those expectations, the risk of supply chain nightmares goes up.
To ensure profitable growth without surprises, the report suggests jumping on 5 focus areas.
#1: Anticipate customer needs & align your operations
There must be more daily hours for evolving buying preferences during Peak Season, like BOPIS and last-minute order changes. You can’t clone yourself. Technologies like AI and robotics are at the top of everyone’s minds, but there’s a lack of confidence in how those technologies can come together in a WMS to balance costs against service.
Satisfying the consumer in 2024 is about anticipation and mindful planning. It’s predicting needs and executing faster, better, and cheaper than your competitors. That’s why 31% of respondents say that investing in a WMS or order management system (OMS) is a top action to prepare for Peak 2024.
Here are some tips:
🔎 Adjust inventory by channel
The traditional, linear fulfillment journey offered by ERPs and legacy systems is not agile enough. Demand fluctuates, channels shift, and customer experiences and bottom lines suffer because of it. That nightmare drives higher investments in systems that allow warehouse managers to adjust how they manage peak inventory for different sales channels.
🔎 Find blind spots that inflate costs
Don’t grow over-confident and think you know your customers. Ensure you have the right analytics to understand performance and demand – and you can make adjustments early and often. Not in January when your CFO asks why sales increased but margins declined.
🔎 Rightsize your inventory
Maybe you don’t need to carry every product in every size and color. Maybe it’s where you put the inventory (See our post on warehouse optimization for DTC and wholesale). That could mean partnering with a 3PL, drop shipper, or regional location to ensure you can fulfill all customer demand at a lower cost. If so, a WMS that also offers in-platform supply chain planning (SCP) capabilities will give you a multiplier effect in terms of the bottom line.
Did you know Deposco offers end-to-end SCP + execution in a single platform?
A truly comprehensive supply chain solution that orchestrates all your processes – Plan, Source, Order, Fulfill, and Return – across B2B and direct fulfillment channels from a single package to full pallets.
#2: Attack complexity smarter
Peak season is a game of chess. You can’t get over-confident or ignore the smoke signals because these days, customer loyalty gets weaker every year. There are no excuses this year, no matter how complex your operations are. Technology helps your warehouse team plan holistically for things they can’t predict.
How to set yourself up to win:
🔎 Create a central nervous system
Size up your current fulfillment systems. Can they present the real-time business picture of profitability in Q4? Know your supply chain KPIs, which are different for each stakeholder. Where complexities are causing you to turn away orders, process refunds for cancellations, and apologize to customers? Reporting should be stupid-simple, yet robust enough to uncover improvement opportunities across all areas from receiving to customer service.
🔎 Digitize your supply chain
Connect the dots with a focus on service levels against cost containment. How much manual work is required by your team to make good decisions? Are there good decisions going on, or just knee-jerk reactions? Are papers getting lost or staff quitting because they’ve worn out their shoes looking for inventory? Empower those workers with a reliable, system-directed device fed by real-time data.
🔎 Look ahead at the big picture
Spend time on scenario planning to prepare for possible future outcomes. Consider factors like merchandising’s inventory plan, marketing’s upcoming campaigns, warehouse capacity, etc. Talk about the tradeoffs of outsourcing non-core activities to reduce complexity and collectively improve decision-making. If you need help, the WMS software partner should have a long track record of designing creative solutions to complex problems (and not abandon your goals after Year 1). Make them prove it.
Deposco Simplifies Diverse Client Needs at Derby (3PL)
77% faster order processing times, 86% reduction in billing time, and new-client onboarding in 2 hours.
#3: Keep workers happy
Full-time warehouse workers continue to drive our supply chains. Most of them run on physical grit and deep tribal knowledge.
Difficulty attracting and retaining permanent staff continues to be a problem. While 51% of our respondents focused on using temporary workers to bridge demand, that’s covering for issues in retention of the core team. Instead, supply chain executives are focusing on keeping the people they already have happy.
🔎 Remove process friction
Understand what’s impacting productivity and which tasks are undesirable, leading to turnover in the first place. Augment them with technology, restructure the process, or outsource it entirely when it makes sense. If your workers are fighting the job itself, they’ll get another. That’s why 27% of executives are focused on upskilling their workforce to address peak labor issues during 2024. Familiarity with the technology is as important – if not more than – as its acquisition.
🔎 Automate where you can instead of hiring up
While automation can be expensive, warehouse management technologies that offer pre-built necessary upgrades – like rate shopping, autonomous vehicles, and automatic sortation – fast, cheap, and easy. To digitize the supply chain, most leaders rely on AI (51%) for predictive analytics and demand forecasting, along with automated guided vehicles (42%). Firms that seek flexible, quick-to-deploy solutions will save much more in the long run vs. hiring up.
🔎 Make the job comfortable
Advancements in handhelds, audio, and visual aids have improved day-to-day tasks significantly. Augmenting staff with automated technology reduces errors and boosts task efficiency. Reducing frustration in performance – physically and mentally – directly impacts labor retention. It will also make you a desirable employer when recruiting seasonal workers.
A happy, comfortable, and invested-in workforce is critical for peak season success. While you can’t control the market, you have direct control over how your team feels about their mission. A strong team can handle anything the market throws their way.
When supply chain vulnerabilities and legacy tech collide. Does your current ERP or WMS feel like a house of cards? Learn how to fix it while having some fun!
#4: Get smarter about shipping
Shipping costs are top of mind as businesses battle shipping cargo inefficiencies, worldwide container shortages, restricted commodity supplies, and rising consumer demand. In thriving economic times, warehouses operate flawlessly and are the silent partners in any business. When there is a financial pinch, they are expected to find the savings quickly and protect margins.
To that end, shipment execution ranks among the top concerns for Peak 2024 (34% of respondents) – even above labor shortages, turnover, and retention.
The industry is responding with specialized tools — such as multi-carrier shipping integrations — that eliminate manual shipping processes and strain when integrating new carriers. These reduce delivery delays, returns, shipping costs, on-hand stock, and customer churn. It’s also a huge opportunity to meet new customer expectations, such as the desire for ESG-friendly packaging, at higher margins.
🔎 Shop rates with a purpose
In the past, shipment execution was easy. You’d go all in with a handful of carriers, annually renegotiating rates and volumes. It was predictable and manageable. Now, warehouse teams are doing much more running around to compare options (and getting mediocre results). Companies that use AI-driven rate shopping tools, like Deposco’s Bright Shipping management application, are saving as much as 20% on every order in just a few clicks.
Tap into Automated Rate Shopping and Save Big!
Part of Deposco’s Bright Shipping application, Rate Shopping allows teams to automatically compare rates and identify the optimal shipping for every order, every load!
🔎 Make fewer, smarter shipments
How many orders do you have going to the same location on the same day? With the high cost of freight and packaging materials like corrugated cardboard, which spiked 9% in 2023, you can’t afford to ship air. Explore tools to automatically consolidate orders where possible, reduce packing time and space, and satisfy the customer’s thirst for sustainable options. Solutions that combine shipping management capabilities can reduce shipping costs and packing materials by up to 25%.
🔎 Connect the dots
You can’t do much to control shipping prices, driver shortages, or supply disruptions impacting delivery, but there’s plenty you can control. If you’re spending 4 hours a day tracking down late, missing, or incorrect shipments in your ERP, you’ll never have time to make strategic improvements. For example, are you blaming high shipping costs on inflation, and passing those costs onto your customers? Or is it a staff-related problem? Digitizing all the variables into one place enables you to keep the balance between cost control and customer experience. A cloud-based WMS helps you identify gaps and errors, enable necessary exceptions, pack orders right, and get inventory ready to sell – rather than always chasing a firehose.
Inventory Fulfillment in ERP: When to Buy a WMS
Tired of your ERP’s inventory fulfillment system going down (again)? It’s time for a WMS system that does what it was built to do.
#5: Plan for the future
For many companies, peak season drives 40-50% of their annual operating plan. Executing at the highest level is the difference between a good and bad year. So it’s worth keeping your tech stack modern.
Right before peak is not the ideal time for swapping out major systems. In fact, many firms are in a code freeze where no process or technology change is allowed. Now is the ideal time to focus on planning those crucial upgrades – researching technology and finalizing roadmaps to set the stage for a smooth go-live, a profitable foundation, and future flexibility before peak kicks off.
- Document what’s at the end of life or had to be duct-taped together last year. Was it an old paper process or an outdated waving strategy that put your team behind?
- Did you lose orders or make too many mistakes?
- What was your risk of an outage?
- Would introducing a new strategy like automation or a new sales channel require expensive, risk-adverse custom development? Under 90 days is the new standard; anything more is a poor choice in the long run.
Alogistico Goes Live with Deposco in 55 Days!
California-based 3PL sees 2x productivity during Weeks 1-4 and within the first 75 days, forecast a 2X run rate within their first 6 months on the Deposco’s platform. This project won multiple awards including SupplyTech Breakthrough’s “3PL Innovation of the Year” and a Top Supply Chain Project from SDCExecutive Magazine.
Not sure about your partner?
Can your technology partner pivot easily to identify blind spots in all 5 areas to accelerate your long-term vision? Do they fit your growth strategy, or do they expect you to fit into theirs?
How’s their system reliability? What do they do year after year to help you anticipate customer expectations and align your operations with rapid, measurable value, adaptability, and confidence?
Confidence in one’s current technology to drive profit growth during peak season was 9X greater among Deposco customers than the non-Deposco users surveyed.