Supply Chain Lessons to Remember
Amazon Prime Day has become one of the most popular shopping days of the year, growing since its inception in 2015 to rival Black Friday when it comes to money spent and overall excitement among consumers looking for deals.
The annual Amazon shopping extravaganza provides an opportunity for small and medium-sized businesses to increase sales and promote their goods in front of a larger audience. While Amazon Prime Day helps create excitement and generate revenue, it also challenges the global supply chain, which has been under increasing stress for the past two years.
From a lack of certain raw materials to a shortage of truck drivers, along with lingering issues from the COVID-19 pandemic, supply chains struggle to keep pace. These problems become exacerbated during busier times, causing further delays and item shortages.
While the supply chain struggles can – in many ways – be traced directly to the pandemic and the ensuing fallout, there are lessons that parts of the supply chain, retailers, and even consumers can learn from this time to improve performance in the future and to better plan for surges.
Lessons for Retailers
Prime Day is estimated to have brought in $10.4 billion globally in 2020 alone, according to Digital Commerce 360.
Retailers will want to ensure they have as much inventory as possible, although that can be difficult for smaller companies. These businesses may not have the available cash flow to purchase additional inventory months in advance or have the resources to store excess products.
Part of this issue can be mitigated through predictive analytics. Retailers can try to use past sales records, predicted sales, estimated marketing impact, and other important metrics to better gauge the number of supplies that will be needed. While this is an imperfect science, it can provide retailers with a way to better plan for these surges in activity to ensure customers are happy.
For retailers that find themselves falling short on deliveries, it is critical to remain in communication with customers. Let those that made a purchase know of possible delays before a sale is made and make every effort to keep them informed as to potential delays in their delivery. Customers will be more understanding if they know beforehand that delays are likely and will feel more at ease if they feel informed throughout the process.
Additional Supply Chain Issues
To stay in step, shippers, carriers and other members of the supply chain should closely align themselves with the operations of business and vendors. They can do so using business intelligence software as part of an enterprise resource planning solution to better forecast potential hiccups. These systems can help track available resources, following the movement of products and purchasing trends, along with allowing for time to switch gears if needed. While there is no perfect solution, advanced technologies can help supply chain members stay on top of the latest needs to anticipate problems in the future.
Supply chain firms should also understand the changing global economic environment. Even as shoppers begin to return to stores, e-commerce delivery will remain a priority. Businesses should better anticipate large online shopping holidays such as Target Deal Days. These events help drive increases in business volume and have grown in importance as more consumers become comfortable shopping online.
Consumers still expect their e-commerce shipments to arrive in a timely manner. While delays could be expected during the pandemic, consumers have also grown accustomed to same-day service from some retailers. The speed at which merchants can get goods to consumers will be one of the most critical factors of their success.
The Ongoing Driver Shortage
For trucking companies, the ongoing challenge remains staffing. The trucking industry has struggled to employ enough drivers to meet demand, causing additional stress on the supply chain and delivery. Trucking organizations continue to make recruiting pitches to drivers – in particular highlighting the safety and security of truck driving – but still, find themselves in need of qualified applicants.
Both retailers and delivery providers need to plan for these spikes in demand. The logistics ecosystem features many pieces that right now face several obstacles. Businesses cannot just assume the system will work without a hitch. There must be planning and organization to ensure that retailers have the raw goods needed to make their goods and that those goods can be delivered to customers once complete. Customers will have some patience, but businesses – and the logistics companies that support them – should not get too comfortable.
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