Limited supply within the 3PL warehousing industry is causing stress on logistics networks, however, much of this anxiety can be avoided. Add quarter-end or year-end into the equation and pressures mount to achieve sales goals and exceed customer expectations.
Simple tactics such as sales and operations planning provide a foundation for successfully navigating these particularly busy times of the year. When sales predictions and production planning are compared to warehousing and transportation capacity forecasts, planning can begin on how to steadily and more smoothly manage the flow of goods within the supply chain. Intracompany communication across departments, i.e. sales, production and distribution is key as well as collaboration with warehousing and transportation partners. This is especially true today when demand for warehousing and labor significantly outpaces supply.
Success is more likely when conversations begin weeks in advance. Some shippers ramp up volume around quarter-end or just prior to a holiday to make up for lost shipping days. Sadly, many shippers make the mistake of letting their warehousing providers know of their plans only one or two days in advance. Some may not even let the warehouse know of their plans at all. This can be very costly. With capacity as tight as it is presently in the warehousing industry, providers may not have neither the space nor the labor resources to be able to accommodate shippers’ needs. Overtime hours are usually undesirable by both the shipper and the warehouse provider, and even overtime may not be an option due to already full shipping and receiving schedules.
While your warehousing provider has the ability to flex space and labor resources, the ability to do so requires planning. Labor planning is critical for operational cost efficiency. When the warehouse cannot plan in advance, labor instantly becomes more expensive and therefore necessitates the extra costs be passed back to the shipper. The pressure and expense are more avoidable when shippers and warehouse partners routinely and openly discuss their needs and even their limitations well in advance.