Throughout the year, supply chains, as with any other industry, have certain seasons in that they thrive. Similarly, there are some times of the year when supply chains break down and struggle to keep up with demand. Find out more about what are the peak seasons of supply chains and some of the steps that organisations take to reduce the risks that peak seasons pose to their logistics.
What are peak seasons?
Peak seasons refer to times of the year when a supply chain faces more pressure than usual. A primary example of this is around Christmas when shops need more stock to sell to customers. Supply chains can feel the weight of this extra stock, with challenges such as complex weather patterns and logistical truck movements causing further complications. These peak seasons can be ideal for a company that sells goods, but logistics companies have a lot of strain during these periods.
Examples of peak seasons
There are a few examples of peak seasons to consider, which are not all based on the time of year. These include:
Typical seasonality
Typical seasonality refers to seasonal shifts that are predictable based on past trends. For example, companies sell more confectionary at Halloween, more flowers around Valentine’s Day and more gifts around Christmas. These seasons fall at the same time every year and tend to see peaks of a similar scale year-on-year.
Distorted seasonality
Distorted seasonality refers to when average seasonality is affected by external means. In the event of an extremely hot summer, for example, the rate at which companies require cold beverages and ice creams increase significantly. Preparing for this is a difficult process that requires a significant amount of foresight.
Supply shocks
Supply shocks refer to surprising incidents that lead to issues in the supply chain. This is completely independent of the season and time of year, with problems including natural disasters affecting a company’s access to fuel. Whilst this isn’t necessarily a peak season by its truest definition, it is still a period in which a logistics chain has a far lower capacity than the goods it needs to move.
Preparing for peak seasons
Companies take several steps when preparing for peak seasons. Preparing properly ensures that the organisation has a constant supply and can sell to all of its customers whenever there is a significant spike in demand. Some of the steps that organisations take when making their supply chains better prepared for peak seasons include:
Analyse the data
Data is one of the most prominent tools that organisations have access to. In recent years the use of data has expanded significantly, with companies tracking sales and logistics information constantly to understand their performance. Look at your year-on-year data and establish the times of year and contexts that affect your sales. Knowing when the busiest times of year are gives you plenty of time to prepare for the risks of a peak season.
Use your space
Make sure that you make the most of all your warehouse space. Companies have plenty of warehouse space that they can use, whether to hold materials for production or individual products that they’re planning on selling to customers. Start using this space in the lead-up to peak seasons to reduce your reliance on the supply chain and limit any harmful effects of excess demand.
Focus on streamlining
Look to reduce any inefficiencies that affect your supply chain. This includes potential diversions along the route or any unnecessary checks that take place in the process. Brexit, as an example, makes supply chains more difficult as it adds more documentation to companies’ exports and imports. Eliminating these steps wherever possible is a must for increasing your company’s efficiency and staying well-supplied.
The dangers of peak seasons
If a peak season affects your company, there are a few issues that you may need to consider resolving. The first of these is that a company builds a negative reputation. If customers can’t receive their products on time, the company can find itself receiving far worse reviews and could lose clients as a result of what they see as poor performance. Solid supply chain management eliminate this risk and guarantee consistent constant stock.
Peak seasons harming supply chains can also have a financial effect on a company. If an ice cream shop has no stock in the middle of summer, they miss out on a lot of customers and the same applies to all industries. Resolving supply chain issues throughout peak seasons means that companies have stock ready for surprise spikes in demand and can sell their products to customers quickly, all whilst safe in the knowledge that there is enough stock for all of the customers that have an interest.