Tactics > order fulfi lment
Peak
performance
How to prepare your distribution centre for
sharp peak periods and unexpected growth
very year the traditional Christmas high-street retailers. Nevertheless, as customers
E
peak becomes more exaggerated. leave their shopping later and later (in some
More people cram the bulk of their cases hoping for the big discounts that we have
shopping into a very small window seen in recent years), the peaks get bigger.
of time, and it is becoming more Remember, this doesn’t mean you are selling
of a problem. more. It just means your costs go up as you are
If you make gearing up to cope with that forced to resource for that higher peak.
peak period a priority, you run the risk of having The hourly peak is the most critical, but
unused assets sat around doing nothing for the fortunately it is the one you have the most
rest of the year. If you set up something too infl uence over. If you are not already planning
temporary, you run the risk of an untrained, to work 24/7, opting to do so can release
untested facility letting you down. If you try to capacity. It is likely that internal processes,
wing it and hope that everyone will pull together not customer demand, are responsible for
and achieve the impossible, you are really taking the worst of the hourly peaks; careful staffi ng,
a risk. To boost business during the nonpeak pick sequencing, and the like can help smooth
season, you could try to fi nd products that are those peaks.
countercyclical, but it’s tough, if not impossible, As for predicting when the peaks will occur,
to fi nd ranges that provide true balance. and just how high they will be, start by reviewing
More practical might be to try to smooth what happened last year and extrapolating
the worst of the peaks. This requires good from that. If you are a start-up and do not have
planning, which in turn starts with the history or have recently moved into new sectors,
numbers. The adage “You can’t manage what hopefully your market intelligence will give a
you don’t measure” is as true in this situation as good idea of what others in your sector did.
any other. Next, look at your sales forecasts. Of course,
By Simon Tomlinson
as logisticians, we all know how fanciful our
Numbers games sales colleagues can be, but if they don’t
First you need to understand the different types produce the forecasts, you will have to.
of peaks in your business. At its most basic you Then examine what your purchasing
will have a stock peak and a throughput peak. colleagues have bought. This is an often
Unless something has gone horribly wrong with overlooked step. You cannot sell what you
the forecasting or a supplier has let you down haven’t bought. Of course, you might not sell
badly, these two peaks are unlikely to coincide. what you have bought, but you can be assured
By the time your throughput peaks (say, early that the business will be highly motivated to not
December), your stock levels should already let that happen. The purchasing plan is a good
be declining. If not, you should start planning source of information—certainly for planning
early for the mother of all sales (you’ll have inbound activity and stock levels but also for
noticed the trend toward January sales starting estimating sales.
in December). From all these data you need to plan how
You can break these peaks down even much stock you are going to receive, and when
further, to include a receiving peak, a pick/ and what you think you will be shipping. The
pack/despatch peak, a delivery peak, and a difference between the inbound and outbound
returns peak. Again, unless something has gone patterns will tell you how stock is likely to peak.
wrong, these should not coincide, although of Armed with your plan, you now need to
course the delivery peak is likely to be very close compare it with your capacity. Again there are
behind the pick/pack/despatch peak. various types of capacity: storage, pick face,
Then you need to understand the weekly, receiving, picking, packing, despatch. Storage
daily, and hourly peaks, as you’ll use each of capacity is relatively straightforward. As long
these for different aspects of your planning. as you know how many pallets or other types
The weekly and daily peaks are becoming more of unit loads (totes, cartons, etc) you have to
and more compressed. To some extent this is store, the comparison is uncomplicated. Pick-
infl uenced by the day that Christmas falls on, face capacity is also fairly simple; it needs to
although not to the same degree as for the be related to the number of products you are
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