More Peak Seasons Increase Supply Chain Pressures

Amazon’s recent inaugural Prime Day is yet another example of how the e-tailer is setting the bar in terms of consumer expectations that inevitably impact the supply chain, and while it’s only early August, the back-to-school season is already kicking into gear.

Hari Pillai, CEO of Speed Commerce, a provider of ecommerce technology, fulfillment and logistics solutions, said retailers and etailers are looking to spread out their sales periods, and it means making sure other players in the supply chain such as his company are in sync.

The No. 1 focus for Speed Commerce before a peak season hits is to understand what inventory is going to be promoted and pushed. That allows it to have the appropriate staffing, both in warehouses and in call centers to handle to handle the anticipated order volume. “Once we know that, we will typically identify high velocity items and move them close to pick lines,” he said. “We will move that inventory around to optimize pick times.”

Synchronizing with carriers such as DHL and FedEx is also key to make sure the capacity is there to support fulfilment during peak seasons, whether it’s Amazon Prime Day or back-to-school season. “Around Thanksgiving, everyone wants those trucks.”

Pillai said handling returns is also just as important as fulfilling the initial order, as the good work done getting products into people’s hands can be undone if the returns process negatively affect a consumer perception of the retailer’s brand. “Often that is neglected.”

He said the general goal is to reduce the “amplitude” of the ever-growing number of peak seasons as delivery expectations rise as well. “Expectations for delivery in a lot areas are improving,” Pillai said. “The shortest delivery interval continues to increase with Amazon setting the bar.” This, of course, affects how the supply chain designed.

For Speed Commerce, the big focus in how to squeeze out latency wherever possible. “Every one in the supply chain is trying to tweak and take latency out,” said Pillai. Right now, the last mile is getting a lot of press as there is a lot of experimentation going on, whether it’s the feasibility of drones or leveraging services such as Lyft. “We're hitting up against some strong physical restraints. You see a lot of experimentation with different modes.”

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