Busy season. Black Friday. Major storms. There are many elements that could cause a surge in your business and it’s important your supply chain is ready. Preparation for these influxes includes finding the right avenue for managing your distribution. Here are a few options to make your operation less stressful and more efficient during surges and seasonality:
Public warehousing is attractive to businesses for several reasons. Public or shared warehousing is one of the most flexible distribution solutions. These agreements offer ease of entering a new market, lower labor costs, and flexible terms. Shared warehousing offers a great solution for companies that experience seasonality and need more capacity in some months to accommodate the surge.
Working with a 3PL can give you an optimal solution. A 3PL that has enough breadth and variety of customers can leverage another customer with reverse seasonality. This reduces the overall cost to everyone because the other company is picking up the cost of the space you don’t need in your slow season.
For example, a charcoal company needs more capacity in the winter and spring while it ramps up for their busy season and supply depletes in the fall. Alternatively, salt companies need more capacity in the summer and fall seasons and then deplete in the winter. These two businesses present an optimal opportunity for shared warehousing due to its reverse seasonality. The diagram below demonstrates the flux between seasons based on each company’s storage needs:
A dedicated warehouse is a model guarantees you will have the space you need during your surge seasons, instead of having to search for flex space every time you need it. By placing your warehouse in a campus environment, your can further leverage the resources of your 3PL with shared labor from the other facilities. Combined with temp labor agency relationships, you can rest assured that you will have the manpower to support your business when you flex up.
There are options for seasonality influxes that go beyond warehousing. Many companies with brick and mortar stores choose to rent trailers to store additional inventory on-site. If your product is out of stock in-store, you can get additional product from the trailer parked in the store parking lot and re-stock the shelves immediately as opposed to waiting for the next shipments. This model is particularly attractive for high demand items.
During a seasonal surge it’s important to be prepared to make the most profitability. Choosing an optimized method to manage your distribution during these times will make for a more successful season and for an efficient supply chain throughout the entire year.