Reducing costs in warehouse operations will be high on the ‘must do’ lists of many supply chain executives following the peak trading period.
A review of peak trading will reveal the levels of unsold inventory which equates to cash the business is holding and will want to quickly reduce. This inventory will also add costs to the operation in terms of space taken and stock control efforts to keep it located away from active stock while decisions are taken on its future.
Omni channel retailers will have a particularly sharp focus on ecommerce service performance.
Costs to deliver peak will come under the spotlight.
Were service levels achieved in line with the cost forecast?
If service was missed, what went awry and can it be addressed for the next peak which is only around the corner?
Costs can be impacted by errant forecasts – profile of throughput is as important as the number of units being handled, carrying excess capacity because volumes didn’t arrive is one thing. Stretching to reach volumes above forecast will require good operational management drafting in overtime and short term agency resources.
Whilst overtime and agency staff are essential components of the peak toolkit both of those routes are generally expensive and can introduce errors that could reach customers = increasing contact centre activity and potentially negative social media coverage.
Costs can also be impacted by productivity misses – what was expected and what assumptions underpinned these targets?
People costs have a significant impact on businesses – margins and cashflow are impacted by people costs, even more so if they are over running forecasts.
What tools did the operational management team have at their disposal to track performance and identify where they could intervene and take pro active steps?
Vitesse can be a tactical solution to improve cost control and help explain where costs are being incurred.
Vitesse can also play a role in a people strategy – Vitesse brings fairness to the workplace because everyone is measured the same, Vitesse also enables performance related pay schemes so consistent performers can be both recognised and rewarded.
Find us on LinkedIn at:
https://uk.linkedin.com/company/vitesse-software
Find more of our articles at:
