Efficient Fulfillment Center Operations During Peak Shopping Seasons

25. November 2024

Optimizing Consumer Goods Order Fulfillment During Peak Season: Strategies for Distribution and Fulfillment Centers

As peak shopping seasons approach – Black Friday, Cyber Monday, Christmas, and other holiday events – the demand on distribution and fulfillment centers surges. During these times, eCommerce and omnichannel orders often experience a 2-3x increase in volume. To meet these demands without sacrificing service quality or delivery times, distribution and fulfillment centers need a well-optimized design that can handle these seasonal peaks. Effective peak-season planning allows businesses to maximize throughput, satisfy customer expectations, and keep operational efficiency high.

Key Fulfillment Models for Peak Season: Omnichannel vs. E-commerce Design

To handle the seasonal influx of orders, distribution and fulfillment centers need strategies tailored to their specific operational models. Let's examine two common models – Omnichannel and E-commerce – and the unique design elements required for each.

Omnichannel Design: Balancing Store Replenishment and E-commerce Peaks

An omnichannel model serves both physical stores and online orders. During peak seasons, one challenge is managing inventory between these two channels, ensuring that store shelves are stocked while meeting the increased demand for direct-to-consumer orders. Here’s how the omnichannel design can be optimized to balance these needs.

Key Strategies

Adjust Store Replenishment Timing: By replenishing stores ahead of e-commerce peak periods, distribution centers can focus on e-commerce orders during peak days without disrupting the flow of store inventory. This “load balancing” reduces pressure on fulfillment resources and allows operations to maintain consistency across channels.
Flexible Staffing: Staffing plans should allow for rapid shifts in focus, moving from store-focused tasks to e-commerce-focused tasks as peak season ramps up. Staff can be reallocated purely to e-commerce fulfillment during peak days, ensuring that both channels receive dedicated attention when needed.
Shifting Workload by Peak Periods: Preparing for omnichannel peaks often involves moving staff to e-commerce operations in a phased approach, rather than all at once. This means focusing on store replenishment first, then on online fulfillment as peak days approach.
Cross-Channel Automation: Advanced automation solutions, such as those offered by TGW Logistics, can further support the omnichannel model. Automated storage and retrieval systems (AS/RS), shuttle systems, and sorting systems optimize the distribution of products across multiple channels. With data-driven insights, TGW Logistics solutions help align workload distribution and scheduling, so that peak periods are managed seamlessly.

E-commerce Design: Prioritizing Outbound Fulfillment During Peak Times

The e-commerce model focuses solely on direct-to-consumer fulfillment. During peak seasons, the primary objective is to increase throughput in picking, packing, and shipping. Here’s how an e-commerce design can be optimized to meet these goals.

Key Strategies

Dynamic Workforce Allocation: Staff can be temporarily shifted from inbound, decanting, and returns handling to outbound functions, which are critical during peak times. With this approach, efforts are concentrated on picking, packing, and shipping, maximizing output for customer orders without expanding the workforce significantly.
Inventory Freezing: Stopping or reducing stock replenishment temporarily allows resources to be concentrated on fulfilling customer orders. As stock levels are strategically adjusted, the focus shifts entirely to meeting the increased demand in order processing.
Extended Working Hours and Third Shifts: Additional working hours, like a third shift, can be introduced during the peak season to handle extra volume. This can be a temporary change, with the third shift being implemented exclusively for high-demand periods to increase daily throughput.
Batch Processing Techniques: By utilizing batch processing during picking and packing, fulfillment centers can increase efficiency and reduce order handling times. Batch picking, for instance, allows orders with similar items to be picked together, reducing travel time and maximizing productivity.
TGW Logistics’ Advanced E-commerce Solutions: TGW Logistics’ automation technology can be customized to suit e-commerce-specific needs, from dynamic picking solutions to intelligent sorting systems. These systems are designed to flexibly scale operations up or down, optimizing throughput without sacrificing order accuracy.

Leading Technologies to Manage Peak Season

Beyond strategy, the right technology is crucial to handling peak demand. TGW Logistics provides tailored solutions that enhance peak performance, including automated storage and retrieval, goods-to-person picking systems, and intelligent software solutions for process optimization. Through proper design and analysis, these solutions provide the scalability and flexibility necessary to handle high demand periods seamlessly.

Analysis and Forecasting

TGW Logistics’ data analytics tools enable distribution centers to forecast demand accurately and plan resource allocation effectively. Analyzing past peak performances, customer behavior, and seasonal trends helps create a blueprint that prepares centers for predictable peaks.

Scalability and Automation

For both omnichannel and e-commerce models, the ability to scale operations is essential. TGW Logistics systems are modular, can scale up during peak periods and scale back down, making it easier to manage both space and labor costs.

Staff and Resource Flexibility

By optimizing workflows and integrating automation, TGW Logistics systems allow businesses to reallocate human resources efficiently, balancing the workload across tasks to avoid bottlenecks. TGW Start-up PLANCISE helps with their Workforce Management Software to execute this task.

Mastering Peak Season Fulfillment with Automation and Strategic Planning

The success of distribution and fulfillment centers during peak seasons relies on a carefully planned design that considers workload increases and resource allocation. For omnichannel models, balancing store replenishment with e-commerce peaks ensures uninterrupted service across channels. For e-commerce-focused centers, concentrating on outbound activities, extended working hours, and batch processing techniques boosts fulfillment capacity during high-demand periods. With TGW Logistics' advanced automation solutions and tailored strategies, fulfillment centers can smoothly navigate peak seasons, ensuring high customer satisfaction and operational efficiency.

By implementing these strategies and technologies, businesses can make peak season success an achievable goal, delivering on consumer expectations while keeping operations streamlined and profitable.