Keeping up with demand and ensuring a frictionless customer experience throughout peak season requires visibility, flexibility and quick action from retailers. That extends to how they manage their inventory.
Overstock and middle-mile constraints due to labor and asset shortages are two big issues plaguing retail, says Dennis Moon, chief operating officer at Roadie, an on-demand crowdsourced delivery platform.
In response, he says, retailers should look for multithreaded operations and fulfillment solutions that can improve their responsiveness while acting as a fail-safe. In addition to aligning with strategic fulfillment partners who can quickly scale and retract based on customer demand, retailers can also take a pragmatic and sustainable approach to their warehouse logistics and inventory management.
Let’s look at three best practices Moon suggests for making sure inventory is where you need it, when you need it, during peak season.
1. Take a hybrid approach to inventory management
The just-in-time (JIT) approach to inventory management requires retailers to run lean, bringing inventory in when needed. In contrast, the just-in-case (JIC) approach favors stockpiling inventory to minimize risk.
Retailers generally aspire to JIT, allowing them to lower overhead costs and improve cash flow. But without the extra stock to act as a buffer, any interruptions to plan (such as bad weather) can slow or stop shipments. As a result, many retailers are resorting to JIC as supply chain disruptions and the ongoing talent war threaten their ability to meet demand. But holding extra inventory comes at a cost many retailers simply can’t afford.
Instead, retailers can benefit from a hybrid approach, using JIT where they safely can and JIC where they must — all with careful and strategic placement of inventory.
Rather than carrying extra inventory to soften the impact of underlying operational issues, the resulting hybrid model focuses on addressing root causes.
“By increasing inventory visibility, improving operational efficiencies and building flexible fulfillment capacity, retailers can minimize the need for costly safety stocks while carving out their competitive advantage,” says Moon.
2. Design your warehouse for efficient inventory movement
Moon also warns that when demand surges exceed retailers’ delivery capacity, inefficiencies can lead to lost opportunities and increased costs — not to mention disappointed customers.
Here are a few actions you can take to make sure your warehouse is firing on all cylinders this peak season:
Increase your inventory accuracy by doing a total pre-season physical inventory count.
Optimize picking and packing workflows so fast-moving products are easy to access.
Dedicate an ample, conveniently located space for staging deliveries.
Batch and route deliveries based on geographic location or delivery deadlines to save money without sacrificing time.
Clearly label orders for fast and efficient pickups (ideally with the help of technology that increases accuracy, such as barcodes or RFID).
Look for opportunities to optimize your facility’s footprint by consolidating packages or using containers for more uniform storage.
If your last-mile fulfillment toolkit includes an on-demand platform like Roadie, make sure your team is ready to work with crowdsourced delivery drivers. Consider these tips for successful order handoffs:
Post clear signage to direct drivers to and through your facility.
Make sure your loading or pickup area is accessible to passenger vehicles.
Educate your team. Ensure your employees are aware that crowdsourced drivers won’t be wearing a uniform, and if they are new to your facility, they may ask employees for assistance.
Provide a point of contact and a phone number so drivers can quickly call if they have issues.
3. Get inventory to the right node in your network
Moon explains that as jammed-up supply chains and consumer demand for faster delivery continue to force change in retail, the positioning of products has become key. To remove the need for middle-mile deliveries and relieve asset constraints, retailers have started to detach from traditional distribution routes and instead hold inventory closer to its final destination.
Partnering with an on-demand delivery platform like Roadie lets retailers quickly and easily transfer inventory between holding locations, such as retail stores, warehouses or distribution centers. Doing so gets merchandise where it’s needed, when it’s needed — helping retailers deliver on the promise of ultrafast delivery and even making returns easy with at-home pickup.
As peak season approaches, Moon’s biggest suggestion for retailers is not to wait.
“Avoid the panic call and do it now,” he says. “Some of the biggest challenges we face are around change management from the employees’ standpoint. Reach out to a crowdsourcing partner now, build your operational plan, run some proof of concepts and get things going so you can roll into peak season efficiently.”
Ready to learn more about how crowdsourced delivery and direct from distribution delivery can help you get ahead this peak season? Click here to check out Roadie’s roadmap to peak season success.