Think peak’s over? Think again. Today’s the day for building the foundations of your next peak period.

According to Malcolm Druce, Managing Partner at BPS Global Australia as soon as the flame from the New Year’s Eve fireworks fade, it’s the perfect time to put your processes in place for the peak periods of 2023.

As I write, supply chain managers around the world are bracing themselves for another festive season – one that has the potential to expose yet more flaws in our supply chain.

They are no doubt focused on putting out the continuous fires that this year’s festive season is producing; however, those who can take a step back and start planning for 2023 will have a considerable advantage over the competition in 12 months’ time.

The problem with peak

The supply chain crisis of 2020 and 2021 has put pressure on customers to start their holiday shopping earlier, and consumer shopping behaviours are changing at an even faster pace. This year, the Australian Retailers Association expects pre-Christmas sales (from November 14 to December 24) to rise 3 per cent to $63.9 billion. With increasing variety in shipping channels and delivery propositions around the world, it is more important than ever for supply chain professionals to ensure they are prepared for peak. Peak is now constant for some, but certainly more than just the festive season.

As the holiday season approaches, many retailers that I have spoken with recently, remain nervous about supply chain reliability. A report released in 2021 revealed that global supply chain disruptions increased 67 per cent annually, all while skyrocketing ecommerce sales and plummeting Australian warehouse vacancy hindered peak preparation.

The rapid growth of e-commerce has led to a greater volume of goods being moved through warehouses at breakneck speeds. At such times, the warehouse becomes a pressure cooker about to explode.

So, how can you ensure there are no fires to put out in your supply chain during the peak periods of 2023?

‘How did we do in 2022?’

It’s fair to say the biggest peak seasons all happen toward the end of the year. That means that companies have from January onwards to assess the effects of the last peak season and make preparations to overcome those hurdles. But firstly, it’s important to take a breath. To pause and reflect. To celebrate your achievements. To draw a line in the sand when the peak season is finished.

When the dust settles, the first question you should ask yourself, your stakeholders and your team is ‘how did we do this year?’ or ‘how did we go with that surge?’. Taking a deep dive into how your people, processes, systems and infrastructure coped under peak pressure will give you a detailed understanding of what worked, what didn’t and how you can do better.

Organisations must also review pinch points and single points of failure – it’s important to look at an operation when it’s fully loaded and its highest volume and ask: “where did we fail and how can we do better?”

At BPS Global Australia, when we prepare for peak, it means doing the legwork of research and reporting on how the last season went. This allows us to make improvements where possible on existing frameworks and procedures, and to assess the end-to-end supply chains of our clients to reduce any pain points.

‘Tis the season to hire

The recruitment challenges of peak sales periods have been intensified over recent years. The supply chain has been severely impacted by skills shortages and the widening skills gap; and staff numbers have reduced over recent years thanks to employees’ desires to work from home and the rise in the cost of living.

Demand for skilled professionals within our sector is expected to outstrip supply by six to one by 2023, and supply chains must now be agile enough to cope with unexpected gaps in workforces. If your business has been impacted by the labour shortage, your peak plans should accommodate for the potential of reduced staff. As more companies turn to aggressive seasonal hiring around the holidays, this trend will continue to grow and recruitment increasingly more competitive.

The reorganisation of workforces including changing shift patterns, introducing training to encourage upskilling and recruiting ahead of demand curves can all create opportunities to address labour shortages throughout the year.

The ongoing labour shortage continues to be felt throughout the supply chain. During the 2021 peak period, a lack of workers was a contributing factor in delays and disruptions. Historically, warehouse operators have relied primarily on seasonal labour to increase throughput to meet peak demand. However, due to record low unemployment rates in recent years, this approach is simply no longer feasible.

Unlock the potential of automation

The best way to confront the labour shortage challenge is through the use of warehouse robotics and automation. Robotics increase warehouse efficiency in countless ways – from improved order accuracy to increased picking speeds and improved reverse logistics.

Peak season can also be a great time to invest in technological upgrades. While undoubtedly it is too late to introduce agile automation for this year’s peak period, being prepared to install new technologies, in order to keep up with the pace of innovation, will ensure you can make the most of automation this time next year.

In case you missed it: Australia’s e-commerce boom: is agile automation the answer?

The great enabler

There are many trends that put automation at the top of logistics bosses’ agendas, not least, a growing shortage of labour, an explosion in demand from online retailers and innovative technical advances. Combine these factors together, and it is estimated that the transportation-and-warehousing industry has the third-highest automation potential of any sector.

Technology has become the great enabler of more efficient supply chain operations and companies need to address gaps in their infrastructure and accelerate migration to automation and artificial intelligence.

At BPS Global Australia, we are always wrestling with our clients’ misconception that robots are here to replace human workers. The truth is they are here to help. As it stands, warehouse employees spend up to 50% of their day travelling to retrieve goods. This includes walking up and down aisles or lifting inventory off shelves when fulfilling orders. Robots can mitigate these issues by autonomously executing most of the walking, reaching and heavy lifting tasks for employees, increasing productivity levels and maintaining accuracy.

The coming of age of technology

The Australian ecommerce market was turbocharged by the global pandemic in 2020. Due to social distancing, border closures and lockdowns, ecommerce spending in Australia in

2021 reached US$49 billion – up from US$38 billion – and our supply chains can no longer afford to miss the mark on peak preparedness.

We live in a time of disruption. Where businesses must adapt quickly to new changes. Traditional supply chain management cannot keep up with increasing demand levels, and the key to gaining a competitive edge lies firmly in the adoption of automation technologies.

When executed well, automation will bring significant advantages, including efficiency, improved accuracy, faster business growth, improved service to customers and reduced operating costs – and above all, will ensure our supply chains will successfully deliver Christmas for many years to come.

Never before have supply chain professionals needed automation to the extent that we do today. No matter how well companies have tried to proactively predict and prepare for rising demand, it is no longer enough. Whether driven by traditional shopping peaks or unexpected consumer demand, technology-enabled operations, fulfilment practices and agile automation are essential in helping logisticians effectively manage surging order volumes when peak period hit.

Prior to the pandemic, businesses’ supply chain digital transformation was moving at a snail’s pace relative to the rise of ecommerce, the increased demands for fast, affordable shipping and the ongoing logistics labour shortages. In 2023, we will get ahead. You must embrace the coming of age of agile automation into your supply chain as soon as the flame from the New Years’ Eve fireworks fade.

An open goal to future-proof supply chains

Supply chain peak season planning should feel like a process that begins on 1st January and lasts throughout the new year. Peak period puts enormous pressure on supply chain managers to ensure products are available and that everything moves smoothly throughout the season, but those who start early will be able to take advantage.

While it’s easy to get caught with your head down putting out today’s fires, looking ahead to next year’s peak periods will allow companies to be more proactive and more successful than the competition.

It is never too early to start preparing for the next peak season. Christmas may only come once a year, but it should be planned for all year round. Forward-thinking chief supply chain managers now have an open goal to future-proof their supply chains by planning for tomorrow, today.