Thrive During Peak Season: 3 Order Fulfillment Considerations

Alex Haines | 7 December 2022

Peak season is here. While Black Friday and Cyber Monday, the biggest sales days of the year, have come and gone, order fulfillment operations are busy ensuring that orders are filled accurately, packaged carefully and shipped on time.

For retailers, this is both a time of getting through the peak and also an opportunity to shine ahead of competitors. Handling seasonal peaks requires automation that simplifies the surge in distribution.

This year, for the start of the holiday shopping period that includes Black Friday and Cyber Monday, the National Retail Federation (NRF) reports that the total number of shoppers grew by nearly 17 million from 2021. That’s makes for a total of about 196.7 million shoppers in the United States. The holiday season, however, isn’t over and continues through December 31st. Retail sales are expected to be about 6-8 percent more than 2021, or between $942.6 and $960.4 billion.

As online shopping has progressed over the past 10 years warehouse operations have been asked to keep up.  What was once a single Friday with retail store deals has turned into a week and a half on-line feeding frenzy. Websites like Amazon are now offering Black Friday type discounts weeks in advance, all leading up to Cyber Monday.

How are ecommerce distribution centers expected to keep up with such a high peak in demand while, at the same time, running efficiently and cost effectively the other weeks of the year?  Maximize automation? Depend on seasonal employees?  Forecast orders ahead of time as best as possible?

Whether you’re in the process of adjusting operations or planning ahead for next year, in order to be best prepared for peak season and the potential 10:1 volume spike, distribution leadership need to analyze how their warehouses are set up.

1) Do Not OVER Automate Your Warehouse

One of the biggest mistakes warehouse managers can make when designing for peak season is to over-automate their warehouse. With an increase in automation and technology options, as reported by Interact Analysis’ Warehouse Automation 2022 report, like AGVs and AMRs, robotic piece picking, goods to person systems and more, it’s easy to understand why operations would want to limit headcount year round. Of note, AMRs and AGVs offer a RaaS (rent-as-a-service) model that allows operations to rent additional robots for peak season, meaning bots do not need to be purchased and therefore wont’ sit idle during non-peak seasons.

Ecommerce surge seasons only last a couple weeks out of the year; therefore, it’s unnecessary to design your warehouse to utilize large capital technologies for peak volume. Additionally, the last thing warehouse managers want to see is their shiny new pieces of automation sitting idle for extended periods of time. 

Automate for average days; simplify for peak.

2) Simplifying Your System for Seasonal Employees

When volume spikes during peak season there is no getting around temporary labor. If the automation in your warehouse can hit peak rates with regular workforce your system is over-designed.  Additionally, if you have enough labor to throw at additional warehouse tasks for peak rates, it may be time to take another look at your labor count. In today’s market, finding sufficient labor to meet needs is the larger question at hand. There is an inherent risk on depending on temporary labor and finding those available resources. In 2022, Deloitte estimated a shortfall of 2.1 million skilled jobs by 2030, noting that “unfilled jobs are likely to limit higher productivity and growth.” Picking tasks alone are estimated to be about 50 percent of a distribution center’s labor resources, according to industry statistics. Find the sweet spot to ensure appropriate labor for peak season and simplify tasks for temporary employees working less than a month out of the year.

Picking technologies such as pick to light, voice picking and RF handheld scanning can be useful tools to simplify operations and reach high throughput. However, lights, voice units, and mobile devices can add up in the price column for large user systems. Additionally, once a product is picked there is still a large labor need for downstream outbound operations. Especially during surge season, packing processes can become intricate and potentially require special handling for value added services along with last minute order drops for same-day shipping.

3) Warehouse Software May Be Your Solution

What is the sweet spot to ensure your warehouse is optimized for average day volume and simplified enough to bring on seasonal employees during peak seasons like Black Friday?  Your answer may be finding the right order fulfillment software, such as a WES and WCS, to organize order drops, labor allocation and outbound processing.

Simplified processes driven by data collecting supply chain software can help facilitate outbound operations and make first-time operators system experts. Waving and controlling order release allows for proper balance throughout the warehouse.  This is particularly important with ecommerce systems as orders are dropped throughout the day, sometimes with less than two hours allowed for shipping turnaround.

Labor management tools also allow supervisors to have a holistic view of daily operations and monitor operator progress.  The dynamic movement of labor to struggling work areas can help ensure maximum utilization of technologies and labor. Lastly, simplifying user interface processes allow immediate utilization of fresh seasonal employees. Coupling affordable RF picking technologies with simplified step-by-step pack stations can make any worker an operations MVP.

These are just a couple considerations to take when working with ecommerce facilities.  A sound warehouse design with strong order fulfillment software can help alleviate the stress of Black Friday operations and make the strategy of hitting peak ratios an exciting challenge!

Author: Alex Haines