Don’t let supply chain basics slip during disruptive periods

“Due to high demand we have made some changes to our delivery services for clothing, beauty and homeware…” – Marks & Spencer

Service update: “Our backlog clearance continues on plan, with collection services returning to normal from Monday… Sorry for any inconvenience and thank you for your patience.” – Yodel

“Due to a small fire caused by a conveyor motor burnout, we are suffering some delays at our Warrington central hub.” – Hermes

In the UK, retailers such as Marks & Spencer are facing delivery delays. Yodel has deferred pickups for a couple of days as it worked to fill back orders from Black Friday and Cyber Monday while a fire disrupted Hermes operations during the busy weekend.

Close your eyes and think back to the 2013 holiday season in the US. Does this sound a bit familiar?

The onslaught of online sales seems to have thrown the fulfilment and delivery businesses off their normal paths. And that’s the problem. Normal. The retail industry does not run on normalcy but rather it has become a focal point for disruption and supply chains are having to play catch up.

While the situation in the UK occurred early in the holiday season, it is similar to what was experienced here in the US last year. Lessons learned from that mishap centered on three basic parts of supply chain management:

  1. Forecasting
  2. Collaborating
  3. Mitigating risks

FedEx and UPS took these three supply chain components and implemented changes to their networks ahead of this year’s holiday season. How are they faring so far? ShipMatrix, a logistics software firm, analyzed the on-time delivery rates of FedEx and UPS during the Thanksgiving week, and each carrier saw improvement. FedEx notched a 91.0% on-time delivery rate, compared to 83.0% in the same week last year. UPS achieved a 95.0% on-time rate, compared to 89.0% last year.

Indeed, improvements in forecasting and collaboration seem to be among the reasons for this improved on-time delivery rate. According to a Washington Post article, retailer Target noted that it had “more detailed conversations” this year with the carriers about their expected package load while Wal-Mart began providing holiday shipment projections to carriers three weeks earlier than it has in the past.

Mitigating risks is a difficult task to manage but FedEx and UPS upped their seasonal employment this year to help with this supply chain component along with adding temporary distribution centres. UPS is setting up temporary distribution centres, or “seasonal Mobile Distribution Villages” across the US. These form a series of connected modular units that create 90 spots where UPS package cars can pull up. These facilities can be taken down and moved to other locations as needed.

So, despite disruptive periods, managing the basics of supply chain can result in success. The start of the holiday season seems to have begun well for FedEx and UPS and with 10 more shopping days left in this holiday season, success is expected to continue. For our savvy UK friends, it’s quite likely that lessons have been learned and a 2015 plan likely to include the basics of supply chain will ensure.