Peak season in logistics means tighter capacity, more opportunities for things to go wrong and more at stake if they do. Capitalising on it requires comprehensive planning and disciplined execution — whether for the winter holidays, late-summer harvest or spring fashion.
In the past, organisations could rely heavily on sales trends and other historical data in their peak season planning. But the COVID-19 pandemic altered variables on both the supply and demand sides of the equation, making past seasons unreliable indicators of what the future will require. As a result, leading businesses and their logistics partners are changing how they plan for and respond to the intensity of peak season.
While historical data is no longer as useful as it once was, real-time visibility is more available than ever. Logistics visibility takes the guesswork out of decision-making in the planning and execution stages. However, using real-time visibility effectively requires additional layers of preparation ahead of peak season. Here are three strategic considerations for integrating real-time data into logistics operations ahead of peak season.
1. Know what data really matters
Timely data is what allows for visibility in logistics. But having the wrong data, inaccurate data or too much data isn’t much better than having no visibility at all. Therefore, it’s important for organizations to clarify the data most important to them. But what is the starting point?
The importance of location data is widely accepted, and in many cases it is an expected commodity. However, what can be argued as powerful—yet hugely underestimated in addressing challenging gaps in the supply chain—is the end-to-end, real-time transportation visibility made possible by tracking devices. Live tracking devices stay with shipments even if they move between shipping modes. The devices allow stakeholders to retrieve or receive status updates at any time without needing to contact carriers or drivers. The owner of the tracker owns the location data and can work with it — including estimating arrival times — from a software dashboard or mobile device.
Second in importance to location visibility is condition. After all, a load of high-end equipment or delicate berries can arrive on time but be at a loss if the products are damaged or rotten. That’s where the other sensing capabilities of live trackers come into play, such as temperature, humidity, shock and light exposure. Knowing both the location and condition of shipments during peak season — or any other time — allows shippers and receivers to make decisions based on facts rather than assumptions. For instance, if a shipper receives an alert that a load of raspberries is running hot, they can call the carrier or driver to have them check the refrigeration unit. On the other end of the transaction, a receiver could prioritise an unloading dock for a shipment that’s running warm or late to save the product or get it onto shelves sooner.
Beyond location and condition, there are scores of other logistics variables that can be monitored and analysed to improve peakseason performance in the supply chain. The key thing is knowing what outcome you want—for example, it could be reducing safety stock for inventory. Depending on the desired outcome, companies should look at final decisions and work backwards to assess whether they have all the relevant data and analytics to allow for more accurate decision-making. The good news is that companies no longer need to tackle the mammoth task of building in-house data science teams for predictive analytics. Models already exist that allow companies to import their data and determine risk scores for different shipment plans. This provides a significant marketplace advantage with relative ease.
The next step is ensuring that data is integrated across operations. It’s important that transportation management systems (TMS) and enterprise resource planning (ERP) solutions reference one source of truth for data, and that application programming interfaces (APIs) import data directly to avoid human errors in retyping or cutting-and-pasting. Logistics teams should work with vendors and consultants well ahead of peak season to ensure they have the right data in the right places when peak season hits.
2. Map the seasons playing field
Achieving real-time visibility is a big step in preparing for peak season. But logistics teams must also understand what to do with that visibility once they have it.
Comprehensive preparation is the answer. The ones who are best are those who understand workflows and standard operating procedures (SOPs) across their entire landscape of operations. By knowing how things are supposed to happen at each link in the chain, logistics teams can recognise when shipments are getting off track and make informed decisions on what to do about it.
Detailed “mapping” of the logistics landscape is what will allow a team to know whether a three-hour border-crossing delay, for example, warrants a call to the receiver. This mapping can also be used to automate alerts from a tracking or TMS platform, providing a cost-effective and fail-proof method to stay on top of dozens or hundreds of shipments in transit at any one time. Automation that’s based on real time visibility can drastically reduce the costs of scaling up for peak season. Logistics teams no longer need to hire more people to make a bunch of phone calls just to find out what’s going on with every shipment.
For shippers, mapping the landscape ahead of peak season means looking at every destination and receiver. What are the workflows and SOPs needed to meet their requirements? For example, do they have one-hour windows or six-hour windows? Similarly, logistics teams should look at the requirements, procedures and past performance of truck, ocean, rail and air carriers. Organising and analysing this information will enable prioritisation, reduce confusion and make decision-making easier when peak season gets hectic.
Carriers can take a similar approach to analysing shipping routes. Port congestion is likely to remain a problem for the foreseeable future. Knowing the workflows and real-time situations will allow carriers to dispatch trucks at the right time and avoid having drivers waiting idle for hours or even days.
Predictive analytics can take the mapping exercise to the next level, giving organisations an opportunity to navigate risks before they impact peak-season operations. “We’re using machine-learning models to look at dozens of variables for each shipment, lane and purchase order and predict risk scores for each,” Shillingford said. “Weeks before a shipment even leaves, we can calculate the risk of missing on-time delivery.” When a risk is identified or real-time disruption occurs, the third aspect of strategic planning comes into play
3. Be prepared to react
Logistics problems are inevitable during peak season and beyond. If you have 100 shipments in transit, at least two or three are bound to need attention. For example, a single truck’s refrigeration unit may be set incorrectly, or a big load of pharmaceuticals may get left on the tarmac because someone forgot to include a unit load device (ULD). With real-time data and automated alerts, logistics teams don’t have to spend time determining that 97 or 98 of the shipments are fine. If there’s a problem, they’ll be notified. Instead, team members can focus on saving the shipments that are clearly in trouble — and potentially save thousands of dollars or more in revenue. Similarly, if predictive analytics show that 10 out of 1,000 shipments are at risk, team members are available to smooth out the kinks for those shipments.
Real-time data is what frees up the human resources for these value-added tasks. But to react effectively, there must be clear plans of action in place and a clear assignment of responsibilities before anomalies occur. When developing SOPs, there are a number of questions to answer in order to be prepared for every possible scenario that may come up during the frenzy of peak season: What are the steps that need to be taken, and by whom? Who needs to be called to look into different types of problems? After the first phone call, when’s a second call made? And when do you get a manager involved?
Clear SOPs are critical because once it becomes obvious that a shipment is in trouble, the clock is ticking. Time is of the essence — either to overcome a delay and deliver on time or to save the condition of the shipment and deliver in full. This urgency leaves no time to research airport contacts or container port procedures, much less work out the details of which team member does what. Companies must enter peak season already knowing who has what responsibilities and what action plans are in place.
Shippers also need to have contacts and clear guidelines for alerting a receiver that a shipment will be late. Because visibility is so valuable to receivers, many shippers are making their real-time data directly available to customers.
From Just-in-Case to Just Right
Supply chains have gone through multiple upheavals since the start of the pandemic. On the demand side, new peaks emerged, while others shifted or disappeared. Meanwhile, manufacturing lockdowns and limited freight capacity further revealed the vulnerability of just-in-time fulfillment strategies.
Uncertain of the future, businesses switched to erring on the side of more inventory — just in case. Some of the largest retailers have bought 40% more inventory than their expected growth for just-in-case purposes. Now there’s too many shoes, too many umbrellas, too many things in warehouses, just in case. What we need now is just right, or at least just about right.
To keep from overspending on just-in-case inventory, businesses need more logistical data and analytics that go deeper into the supply chain. They need more visibility from the first-, second- and third-tier suppliers. They need to understand what the challenges are from there all the way to the factory, and from the factory to the distribution centers, and on to the retailers and even customers. More visibility will allow logistics teams to balance the harmonics of those connections as they stretch or narrow due to unpredictable events.
With accurate data on the timing and condition of shipment arrivals, receivers can even begin to think of in-transit shipments as inventory, which can unlock enormous value and make for very happy customers during peak season. Ultimately, the logistics operations that succeed during peak season will be the companies that mapped the playing field and integrated real-time data and analytics in the months before peak season.