Optionality is Key to Logistics for Peak 2023

Preparations for peak holiday season 2023 are well underway, and the key this year, more than any other, will be optionality.

Unfortunately, time is limited, as businesses traditionally start building up all that inventory in July for the fall and winter holiday sales. As covered by my colleague Mike Royster, you already should be conducting a transportation capacity analysis and examining options.

Beyond that, flexible labor might be your only lever to scale up or down, both in your warehouse and in your customer call centers. Because when it comes to Peak 2023 sales volumes, WHO THE HECK KNOWS? Right now, I can find projections that say Peak 2023 will be down 10%, up 7% or about the same. So, who are you going to believe?

Disruption Makes Forecasting Altogether Useless

Traditionally, before the world of assumed certainty became one of known uncertainty, enterprises did forecasts in June and July for Black Friday and the holiday sales season. Marketing reports back that they plan to kick off Black Friday sales in October and expect $30 million in sales for October, $40 million in November and $50 million in December.

Leaders take that sales plan to develop a staffing plan and then a hiring plan. Since it takes a few weeks to get people up to speed, managers might take the above forecast and plan to hire 30 people in September to get them trained for October, hire 40 in October so they’re trained for November, and hire 50 in November so they’re trained for December.

If you hit those estimated numbers and nobody resigns, you’re perfect. But in today’s labor market, as Logistics Management reports, some companies have had 80% turnover. Your employees have options too and can head down the road to earn a dollar or two more. Therefore, as everybody in the industry knows, it’s tough finding and retaining labor for your warehouses, distribution and fulfillment centers.

Flexible Labor Helps Fix False Forecasting

And what if those sales numbers are 20% too high? (Remember, U.S. retail sales fell last December.) Or what if you just hired 35% too many people?

What if a recession happens? Sure, you expect sales of women’s pajamas to vary throughout September, October, November and December – men will buy their wives and girlfriends women’s pajamas closer to the peak holiday season in December. But if a recession happens, those guys might not have the money to buy women’s pajamas – they might have to spend what little money they have on boring things like food, mortgages, energy …

The reality is, the best peak planners of the past assumed accurate sales forecasts, accurate retention numbers and a near-perfect plan. For Peak 2023, the more likely situation is a December where everyone is working 40 hours of overtime and you still cannot get orders out, or you’re laying off workers because you hired too many.

That’s why flexible labor through Task4Pros or Tompkins Ventures’ Caribbean-based call center Partners are your best route for optionality. I would love to discuss how Tompkins Ventures can help your enterprise scale up or down to handle Peak 2023 – no matter how inaccurate or accurate your forecasts are.