Procurement specialists practice all year just to prepare for the last few months on the calendar. During this time the need to streamline sales and operational planning increases, which means having visibility into the supply chain logistics carriers distribution channels (whether by air, land, and sea) is extremely important.
Keeping demand and fulfillment in sync with consumption and sales will be the biggest challenge for electronics companies this holiday season, according to Ann Grackin, Chainlink Research CEO. This may seem daunting, since the Asia-to-US ocean traffic crowds up quickly with the shipment of holiday goodies (electronics, toys, clothes, etc.), she said.
After finished goods arrive in US ports from overseas, they then typically travel two thirds of the time by rail before arriving at their destination. As inventory moves through the supply chain, keeping track of it from factories to stores requires operational expertise through partnerships and technologies pulling the correct levers at the perfect time and educated people managing the projects.
Ingram Micro Mobility typically moves more merchandise in one day each day during the two weeks following the US Thanksgiving holiday, compared with any week throughout the entire year, per Alex Paskoff, executive vice president of the distributor's Consumer Division & Strategic Development division. The Indianapolis facility near the FedEx hub sits on more than 1.5 million square feet of logistics space.
Forecasts, product availability, and supply chain visibility are the top three variables procurement specialists need to consider. Compare that with logistics specialists who will need to pay more attention to capacity, labor, and contingency planning. Here are some tips to make it easier for procurement and logistics specialists to make it through the holidays:
- Watch forecasts related to lead times closely. There are so many variables that can alter forecasts for products, from component shortages to changes in the weather. For many procurement specialists, the biggest challenge becomes the 12-month rolling forecast often updated weekly to prepare for peak times. Paskoff said realistically they are between six and 12 weeks from the time retailers place orders and OEMs can deliver products.
- Increase visibility by having a better understanding of demand. Tracking merchandise from overseas manufacturing plants through customs and on to freight rails requires a better understanding of whether components will move to allocation. That means keeping an eye on production level capacity, according to J.R. Saylor, executive director of supply chain operations at Ingram Micro Mobility.
- Port delays may mean rerouting finished goods. As Grackin mentions, ports are extremely busy during the fourth quarter of each year. Delays may require rerouting to make sure merchandise gets through customs and to retail store floors as scheduled. It all starts with keeping a close eye on timely procurement of raw components.
- Remain nimble. During the fourth quarter, many goods distributed by Ingram Micro Mobility flow hand to mouth, from OEM through fulfillment and out to consumers, within about 24 hours. On any given day the distributor's division ships between 70,000 and 80,000 orders.
- Build a reverse logistics strategy. Specific to mobile device manufacturers is the trend toward reverse logistics. Ingram Micro Mobility processes more than 10,000 returned devices daily, some on behalf of carriers like T-Mobile.
What tips can you share that will help procurement and logistics specialists prepare for the holiday months?