Another peak season ship-show is behind us. Another year of being able to count on one thing and one thing only – inventory emergencies and disasters. Or close calls, at best. The risk of unreliable fulfillment systems is no match against what Forbes calls a “weird” 2023 economic outlook.
Facing possible recession, a 2023 inflation rate of 9.1% (US) and 10.7% (Europe), strong labor markets, supply chain globalization and geo-political threats, growth-minded businesses are revisiting and reinvesting in confidence for their 2023 peak planning.
Expect traditional peak planning approaches to die on the vine when it comes to legacy technologies. According to the latest supply chain trends of peak season, they already have:
- Only 42% are confident in their current systems to handle peak season
- 79% say a modern warehouse management system (WMS) or order management system (OMS) will improve profitability in peak
- Only 36% have invested in a WMS/OMS
Q1’s eternal return
Riddled with physical and mental exhaustion, technology frustrations and disappointing January financials, most businesses find the thought of next year’s peak planning efforts revolting right now.
The arduous planning and hiring they did in September to prepare their fulfillment operations still led to risky decisions, surprises and finger pointing. “We’ll fix it before next year”. Right now, it’s: “Ahh, we have a few months to breathe before we have to do it all again”. Actually, that Q1 breather is exactly what keeps pushing retail, manufacturing and 3PL businesses further underwater.
Businesses that prioritize reliable and flexible WMS/OMS software early on in their 2023 peak planning will have the upper hand. The first step is admitting that you have a problem.
First, cry “Uncle!” on eroding margins
Most companies know they’ve hit their breaking point with inventory fulfillment in ERP and legacy systems. But for one reason or another, they fail to do the math on how these lagging technologies are unraveling the very bread and butter of their business.
That mid-summer retrospective rolls around. They unpack what went wrong, sharpen their swords with a few operational adjustments and hope for one more season. Eventually, someone cries “Uncle!”, usually at the very worst times…
A system outage or staff walk-out on Black Friday. Late, missed and incorrect shipments during Cyber Week. All because their system couldn’t keep pace or show reliable inventory. But for some reason, the weapon of choice is still to increase headcount and safety stock, according to the latest peak season 2022 report.
Top methods relied on for peak readiness in 2022
- 51% hired more temporary/seasonal workers
- 43% increased labor retention efforts
- 40% asked workers to commit to overtime
- 43% increased held inventory
- 46% bought or replenished safety stock earlier than in 2021
With nearly half (48%) of companies now experiencing peak-level volumes all year long, reducing dependency on capital-intensive approaches has become a top focus. As such, businesses are opting for fast-value WMS/OMS technologies that attack inventory problems all year long.
Through automation, real-time inventory visibility and always-on information, these cloud WMS/OMS systems greatly cut down on order mistakes, delays, manual labor and costs, tech onboarding time, shipping costs and more.
Start early and be agile about it
While a technology change may not feel comfortable right now, establishing real-time visibility early on helps to reverse profit erosion – while building confidence and agility to fast-moving changes down the road.
With the breadth of available software integration offerings, a modern WMS/OMS gives companies a central nervous system of flexible, consistent solutions that can be implemented and updated on the fly to address the bottlenecks and unforeseen changes of peak season.
For example, if product availability is the hot issue, having built-in supplier and carrier collaboration already in place allows businesses to tap into alternate sourcing or buy smarter, to accommodate high volumes and shifting demands without disrupting profitability or customer experiences.
Many businesses have already taken that step, with 54% planning to invest in a full-featured warehouse management system by 2024. Designed to implement within months, these applications reported peak week results of 40% more total order volumes handled YOY in 2022 with 100% system uptime.
Businesses have tripled hourly picking rates on Day 1 of implementation, alongside shipping 7X more orders with fulfillment in under 24 hours. In addition, the fast onboarding of temporary staff, 99%+ order accuracy and huge cost savings have made WMS/OMS software a crucial competitive advantage in your 2023 peak planning strategy. Learn more