Guide To Peak Season Supply Chain Preparation
2020 had an unprecedented impact on the supply chain of many industries and changed how companies look at peak season preparation. The Covid-19 lockdowns resulted in mass factory closures, shipping delays and changes, and other warehousing disruptions. This greatly slowed down the production and transportation rate for many areas of the supply chain.
Now that Covid-19 precautions are being lifted, factories are opening up again and there is a high demand for products and transportation from businesses. This demand can improve your company’s status financially, but could also interrupt your company’s logistics if you’re not prepared for it.
Peak Season Challenges
The key to peak season preparation is identifying the main challenges your company faces. Once you identify these challenges, find ways around them, or create a plan to plan to deal with them when they arise.
The length of peak season
It’s fairly easy to note that this is an unprecedented peak season, but the next step is knowing its beginning and end. If your company doesn’t know the span of peak season, it could result in unnecessary seasonal labor and equipment costs. If your peak season is longer than expected, your company may not be able to meet incoming volume demands.
Your company should always analyze the number of major promotions, like black Friday and Cyber Monday, and if Christmas day delivery will be available. It may still be difficult to pin down the span of peak season, but taking precautions can help you diminish the consequences.
Accurate forecasting of sales volume diminishes many complications during your peak season. If your company can identify when a spike in volume typically occurs, it may be possible to maintain that spike for a longer period of time. This is a difficult task for a company to accomplish but is possible with accurate data analysis and forecasting.
Efficiency and managing labor
Peak season may require your company to hire seasonal workers. The onboarding of new employees makes accurate communication and proper training necessary. Miscommunication can cause wastefulness and leave room for mistakes if not handled promptly.
Why Planning for Peak Season is Important for Your Supply Chain
Your company doubtless has its own ways of planning for your annual peak season. No matter the size and capacity of your business, a surge of business is bound to bring complexities that your company may or may not be prepared for. In the years before 2020, there were tried-and-true methods for looking at past data to prepare, though that method has become less accurate due to shifting trends.
Production, transportation, and industry rates went completely haywire in 2020, making previous years’ analytics inaccurate regarding what will happen in future years. It’s time to reconsider how your company prepares for peak season, and what changes you need to make to recover from 2020. This guide will cover key points in the upcoming season that can help your company stay efficient, proactive, and diminish any difficulty that may come your way.
Plan in advance
Plan your shipments as early as possible. Prepare by booking your freight capacity and staying in close communication with your shipping partners. When your freight capacity is booked and you know the freight availability, your partners can have weeks of lead time. This gives your company and its affiliates a timeline to follow so that shipments can run smoothly.
2020 brought up new challenges and forced companies to find budget solutions with persistent fees and higher rates. These challenges may be recurring, and your company will have to utilize these solutions again. Using historical freight data can assist you in correcting these fees, or advise that you reroute shipments. Planning both a timeline and a budget gives you the resources to solve the unexpected.
Technology has come a long way from paper-heavy accounts payable departments and Freight Audit and Payment. Your company can take advantage of these advancements with Transportation Spend Management (TSM). Transportation Spend Management’s main goal is to help your company become more proactive and optimize its processes.
TSM can bring your company from using mere Freight Audit and Payment (FAP) to being a leading company. It does this by collecting your company’s data and analyzing its rates, volumes, and accessorials. Maturing to TSM streamlines your FAP and optimizes your data management software so your company always has accurate data.
Transportation Spend Management incorporates financial optimization by evaluating any change in data and providing constant visibility. TSM can optimize your budget, rates, cash flow, forecasting, and payment process. Trax can help get your company started on the path to TSM maturity and optimize your technology to get ready for peak season.
Finding the most efficient carrier with the lowest rates is a difficult task for companies, but there are ways to manage these rate differences. Trax’s rate manager puts this information into one place for better efficiency and accuracy. Trax’s rate manager collects various data and gives real-time, accurate information on carrier rates. It also gives your company confidence that these carriers are compliant with enterprise requirements.
Your company can have access to efficient and accurate data for rate management that dissolves the cycle of freight audit and rate maintenance. With a rate manager, your company can work with carriers that fit perfectly within your budget and enterprise requirements. Once these criteria are met, it lowers the possibility of overspend, miscommunication, and general inefficiency.
Use your data
Proper management of high-quality data can give your company more visibility and lead to accurate forecasting. Your company’s data can be centralized and normalized for constant review. Consistently reviewing data heightens its quality and results in more comprehensive reports. If your company uses machine learning algorithms and new analytics, it can become a leading company in terms of forecasting.
Quality data collection helps your company find patterns and trends in business volume so that you can predict the next seasonal spike. Data analysis products are always fluctuating and evolving, but with optimal methods and experience, your company’s forecasting knowledge will become indispensable. It can offer guidance that allows your company to hire the correct number of seasonal workers and creates a budget that allocates money for optimal use.
Implement a multi-carrier strategy
Using Trax’s rate manager helps you find the right carrier to save your company money. Another strategy is using this information to diversify your carrier relationships. Multiple carriers can increase the amount of your company’s met needs. The demands of your customers can help you choose the right carriers, ones that cover the regions and service options that you require.
A focal point in finding the right carriers for your company is saving money, but creating a multi-carrier strategy calls you to look further into your company’s requirements. A carrier’s poor performance can be a deal-breaker for customers and harm your brand. Sometimes, better performance is worth a greater initial cost, as it can result in savings by improving customer relationships and brand loyalty.
A multi-carrier strategy amplifies your company’s regional coverage and overall performance. During peak season, it can broaden your company’s capabilities, saving time by preventing dissatisfaction and improving overall transportation service.
Streamlining payments is a part of maturing to Transportation Spend Management, though your company may be able to focus more specifically on its payment process. If your company’s payment process is based on a paper-heavy accounts payable system, it may be the cause of inaccuracies and inefficiencies in your payments. Peak season is the worst time for your company to handle late or fraudulent payments, but moving to electronic payment can eliminate that hassle.
Streamline the payment process and move toward electronic payments. Get away from paper invoices that go through the bank, because using electronic payments ensures accuracy and efficiency. With same-day payments, you can greatly improve your carrier relationships and overall service during peak season.
TraxPays is the perfect solution to simplify your payment process. Traxpays collects your data and analyzes how to best meet your carrier’s payment needs. With this information, Trax sends you a weekly funding request that itemizes the payments your company needs to make and to whom. You then pay the invoice amount to Trax, who sends the correct payment to your carriers in the correct format. This payment process is easy to understand, and keeps your payments organized during peak season.
Trax is here to guide you through all your preparation needs for peak season. This coming high-volume season is taking place in a particularly unique year, one that constitutes new territory for every company. Through it all, our products offer the solution to your company’s preparation process. Plan a consultation with us so that your company can get started on our Transportation Spend Management platform.
Our products are here to optimize your technology and analyze data to bring you the right carriers, and ultimately help your company lead in spend management. With our rate manager TraxPays payment process, and more, we can simplify the complications that come with peak season. Contact us, and we’ll help get your company prepared for what is to come.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.