In any normal year, the majority of online retailers would now be gearing up for their peak sales period in the run up to Christmas. But this is not a normal year and almost every business with an ecommerce dimension has already seen sales peaks during the Covid-19 pandemic that were higher than anything they have ever encountered. Nevertheless, it is not hard to foresee that, with severe restrictions likely to be in place right through the holiday season and beyond, demand for online items will surge even higher over the next couple of months.
Advanced preparation and planning done beforehand will pay off. The systems and procedures you have put in place to handle significantly increased seasonal volumes should mean that even with temporary hired-in resource, things will still go relatively smoothly. Or will they?
Even if they have not experienced business during the pandemic, most online resellers can cite at least one experience of underestimating the impact of the festive season. As it is not something they generally want to repeat, a common practice is to hire in some agency staff at a premium to help with the increased workload. On Christmas Eve, all being well, they can sit back and breathe a sigh of relief, knowing they have just about coped, once again.
And it is easy to see why, with the extra sales and profits potentially generated at Christmas, the short-term cost of the labour involved is easily justified. However, cost aside, using temporary labour at any time can bring problems. The pandemic has the real potential to bring additional challenges. Regular staff will have to take time off if they become ill or are required to self-isolate. That will inevitably put pressure on your existing operations but recruiting temporary replacements or adding short-term capacity over the peak season will not be as easy this year either.
Even if it is possible to recruit effectively, the main problem with temporary employees is user unfamiliarity. With even the best designed and implemented systems there is a minimum level of training needed for temporary staff to be able to function, even at a basic level. New staff will be well short of the experience and knowledge of regular staff, no matter how well you train them. They will not know the environment, the product, or the processes. So inevitably they will be less productive, absorb more supervisor time, and generate more errors which require correction and incur time and cost. They may also cost you a few lost sales, and some unwanted customer issues.
So, is there a solution to this? Is it possible to minimise the requirement for additional labour in the Christmas period and still meet order fulfilment targets? Well yes, there is, and it seems odd that many companies would rather have a heavy financial outlay on extra staff at Christmas than deploy an IT system that could lessen or potentially even eradicate the need for those staff.
It is not unknown for companies selling products with a strong seasonal appeal, for example toys, to increase their annual wage bill by 50% in just the two months prior to Christmas. While some extra cost is always likely there are many ways deploying the right IT system, a WMS in particular, can help. This would not only reduce your seasonal expense, but also minimise your costs and boost productivity all year round.
To paraphrase a well-known expression: “A WMS is not just for Christmas.” Not only will it help you manage workloads and reduce excess labour costs at Christmas, it will bring joy all year round! A WMS is designed to manage your physical stock with optimum efficiency by using simple, efficient, and secure processes for all activities from receipt through to despatch. As these are largely system driven, this reduces reliance on staff knowledge, a particular benefit when using temporary labour.
A WMS for example will ensure that all the information you need about received goods is correctly recorded. It will then automatically instruct putaway to a system generated location, removing the need for staff to know where product is normally stored. When you receive an order, it will direct your pickers to the correct location to find the stock, taking into account any date or FIFO (first-in-first-out) rotation. It will then manage your pack and despatch process, ensuring you despatch the right product and quantity.
The benefits of using a WMS – accuracy, efficiency, productivity, and discipline – are magnified when you use the system in real time with a dedicated app for handheld devices. This allows everything you do to be recorded in real time, making your stock data accurate to the minute. It also means you can build in as much barcode verification as you need, trapping errors immediately and ensuring the complete accuracy of everything you receive, pick and despatch.
Having a WMS gives you a solid foundation of operational ‘best practice’ which can deliver even greater benefits at your seasonal peak. When you need extra staff, equipping them with an inexpensive handheld device reduces their training needs, so they can be effective almost immediately. As their work is system-directed and verified by real time scanning, errors and supervisor intervention are cut to a minimum, allowing permanent staff to focus on their own roles.
To save the punchline to the end, the best part of this is the cost. A WMS like ProSKU which is available at a competitive monthly rental needs little cost justification for the normal benefits it can provide. It will make your operation lean, efficient and competitive all year long. That is a good benefit but may be especially so this year when sales peaks are likely to be higher than ever just when regular staff could become ill at any time and finding short term replacements and extra capacity is going to be harder. When you consider the high (and recurring) cost of temporary labour and the degree to which a WMS could lessen this the investment becomes positively insignificant.
Alex Mills is marketing director for warehouse stock management solution ProSKU. With a logistics background and long career at WMS software vendors (and ProSKU parent company) Chess Logistics Technology, Alex has seen momentous changes and developments in both areas. He has worked extensively with companies in the retail, wholesale and logistics sectors, as well as more recently within ecommerce and fulfilment.
Alex is keen to help ecommerce sector companies benefit from some of the experience and practice of stock and warehouse management in other fields. Over the years he has contributed articles, views and opinions to industry trade journals and media on a variety of themes and topics.