The holiday season, with its fluctuating demand, brings both big opportunity and potential risk for the supply chain.
“At the holiday season, the supply chain is particularly important,” said Ken Katz, national property risk control director at Travelers. “Often, it is the most profitable point in time to understand the supply chain since it makes the difference in getting the sale or not. Customers have a compressed wait time, and a competitor is just a click away.”
Both OEMs and product sellers need to look at their supply chain. For those building products, it's critical to consider backup sources of supply for critical component, said Katz. Further, forecasting becomes critical as OEMs consider how much inventory they need on hand to maximize sales while minimizing risk. Consider a variety of important questions:
- How much product will you need?
- How much inventory do we want to keep in house?
- What competitive advantage does having product on hand?
- What channels or geographies do those products travel?
- Are weather delays likely?
- If more inventory is needed, will the supplier have it on hand?
“It all comes down to knowing supply chain and understanding your suppliers,” said Katz. “Having those communications channels with your partners helpsyou validate any assumptions you are making.”
Electronics retailers, especially those selling on line, need to consider customer retention. “You want to try your your best to run through potential scenarios and build a strategy on how to retain customers in the event of a customer issue,” said Katz, adding that rain checks for out of stock products and discount coupons can be helpful strategies.
Across the supply chain, staffing during the holidays can be a giant hurdle. The training component is big,” said Katz. “You need to consider how you can manage and train people to make sure they get the right experience.”
A solid training program minimizes reputational and compliance risk associated with seasonal workers. “Companies that do training well have programs to make sure that holiday hires are meeting health and safety requirements, as well as customer safety standards. “
A final consideration is theft. “Everything gets magnified during the holiday season, including theft,” said Katz. “With that magnification of exposure, you want to similarly magnify all the good controls you have in place.”
Think broadly about security. Ensure that the security systems in warehouses and building are in good working order. Check fire alarms as well. Safeguard products during transit and delivery.
Let us know about your holiday supply chain preparations in the comments section below.
— Hailey Lynne McKeefry, Editor in Chief, EBN