Is Your Supply Chain Prepared for the Holiday Season?
With the holiday season upon us, this means Santa is gearing up to deliver presents all around the world to relatives and loved ones.
During this time, delivery companies such as FedEx see an increase in shipments, with their forecast predicting an 8.8% hike in activity. UPS is predicting an even larger increase of around 11 % in deliveries. The question is—are UPS and FedEX equipped to deal with the extra workload?
In the previous year, Cyber Monday, which is the next working day after Black Friday, brought with it a 20.6% increase in internet retail transactions. During the last weekend before Christmas, an increase of 37% came to internet retail transactions compared with the previous year. The inundation of orders and data swamped resource management networks, and the shipping industry was also consumed by this problem.
Added to the increase in orders were weeks of the worst kind of winter weather. This hindered delivery companies to the point were orders were not fulfilled on time and companies such as Amazon, FedEx and UPS were left to come up with their own solutions. For example, UPS offered their workers overtime on Christmas night to prepare orders for the following Thursday and Friday. FedEx expedited some orders to be collected from their depots on Christmas morning. Despite these measures, many customers were left scratching their heads, wondering as to where their Christmas presents might be?
Bad weather was certainly a major contributing factor, but UPS admitted the real problem stemmed from the overloaded network. The system they had in place was not fit to manage the necessary resources to allow orders to be fulfilled on time.
Optimization technology, which handles real time operations, assists companies with the management of resources in what is a fast evolving environment.