FOCUS: Holiday Purchasing + Procurement in Manufacturing

Professional Mechanical Engineer team Working on Personal Computer at Metal lathe industrial manufacturing factory. Engineer Operating  lathe Machinery. Product quality Inspection

Walk into any retail store starting October 1and it becomes obvious that the holiday season is already in full swing.

Some may still be in the Halloween spirit while others have fast-forwarded straight to December and the bright lights and big trees that come with it.

From a manufacturing and retail perspective, the messaging extends beyond décor – if orders haven’t been placed for the Holidays and into the beginning of the New Year, simply put: You. Are. Behind.

“Suppliers, manufacturers, and third-party logistics companies are all striving to keep every business client happy during the holiday season. Yet it only takes one changed invoice and missed communication to cause havoc with your supply chain.”

Can you reach the top shelf?

While the immediate need is keeping the shelves stocked for a bustling Q4, the reality is that strains on everything from supply chain to customer service during this time will impact lead times months into the new year.

Ideally, orders for 2024 Q1 and Q2 are finalized and in the pipeline, as well, so recovery from the Holidays doesn’t have a negative effect on the beginning of the next year.

And, don’t forget, after the rush of December, parts of the manufacturing industry finds itself in the middle of winter where bad weather can pick up where the Christmas rush left off.

“Your supply chain could be running on schedule until the weather reports predict a large storm system is on the way that has the potential to shut down operations for your suppliers and distribution centers.”

Manufacture a plan

To keep things running as smoothly as possible, it helps to complete a few important exercises intended to prepare your organization and your customers.

This is a great list from Logistic Brew with our summary:

Track and Consolidate the Data

Relying on the collective memory of your team to plan for the holiday rush will not serve you well. “…collect all the bills, contracts and other official paper you kept in drawers. As these data are the key element to manage the supply chain, it will be the basis of forecasting trends, associated risk, deciding goals and making strategies to escalate profits.” And don’t forget to share this information internally so everyone is on the same page.

Forecast your customer behavior

Think through your customer’s needs and challenges up until this point and consider what impact the past 9 months will have on the coming three. “Before the holiday season, it’s crucial to observe and analyze the consumer’s needs thoroughly.”

Communicate: both externally and internally

Breakdowns in communication at this point in the year can have detrimental effects to your bottom-line and your customer’s trust in your organization. “Constant communication with trading partners and the internal team will help you resolve the problems at the initial stages. Alternative plans must be discussed with everyone to avoid chaos.”

Streamline the internal process

One universal truth in manufacturing? A flawlessly executed holiday season is unlikely. Anticipating issues so the disruption to your operations is minimal is key. “This is known as streamlining the internal process. It would help if you are alert in the holiday season with up-to-date monitoring, alerting and tools.”

Check and re-check: Equipment & Procedure

Similar to the point above, it pays to be prepared. The same special equipment and procedures put in place to manage the rush of the holidays could be your downfall if left unchecked. “When it’s the peak time of sales, the addition of carts, technology, forklifts, among others, are usually made to escalate productivity. So, it becomes vital to check and even re-check all the new installation and equipment.”

Tackling Shipping Costs

Fast delivery has become the expectation, not the exception. Consider new options to keep costs down including maintaining a diverse carrier mix, which can “…assist businesses in managing growth and increased volumes while saving money, improving the customer experience through speedier delivery, and expanding capacity.”

All said, it pays to remember, while retailers are looking to have at least 8-10 weeks of product on-hand to meet holiday demand, in manufacturing the goal is quite the opposite; lean production with very little on the shelves.

This differing approach to the Holidays and New Year creates the motivation for both sectors to do their best to work together; but the rush to do so in an effective and efficient manner is bound to include some bumps along the way. As always this is where having the right people in the right places can make or break this season and your next. Give yourself the gift of peace of mind and reach out to TZR to meet all of your recruiting goals.

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