June 19, 2019
It seems like every year companies begin marketing festive events earlier and earlier, causing spikes in consumer demand for certain products. As a supplier in the CPG market, seasonality can have a huge impact on your supply chain. According to surveys conducted over the past 5 years by the Institute of Business Forecasting & Planning (IBF), the average error rate of forecasting SKUs just one month ahead of time in the retail industry is already at a whopping 30%.
Depending on what your company sells, certain periods throughout the fiscal year can worsen this issue. With the 4th of July quickly approaching, an optimized strategy to manage your distribution during these times will make for a more efficient supply chain. That being said, working with a consolidator is a great approach to prepare you for these issues and handle seasonal surges that may arise in your supply chain.
How a Consolidation Program Helps
A viable consolidation program does more than just improve retail compliance and mitigate chargebacks. It also provides total visibility to your entire supply chain and harmonizes purchasing, transportation, warehousing and customer service. A major highlight of this process is the set cadence in which orders are cut, handled and delivered.
Benefit from Set Sailing Schedule Consistency
A consistent replenishment cadence, or set sailing schedule, gives suppliers predictability to base inventory forecasts; resulting in higher fill rates and increased retail service levels. This eliminates the need for a supplier to utilize Less-Than-Truckload (LTL) or partial truckloads from multiple transportation providers. Instead, the consolidator combines orders from multiple suppliers at their warehouse with shared destinations and ship dates to make full truckloads for retail delivery. Order visibility is shared between the supplier and consolidator, giving both parties the ability to track Purchase Orders (POs), inventory levels and deliver shipments to retailers at a cost-effective rate.
There are many factors that may contribute to a surge in your business. For example, according to SkuNexus, 23% of all US consumers are using click and collect (buy online and pickup in store) while 32% of Millennials and 35% of Gen Xers currently utilize this method. Trends like this coupled with seasonal demand are all motives for optimizing inventory management. The streamlined process of a set sailing schedule ensures a compliant delivery to retailers and properly prepares your supply chain for seasonality.
Reduce Order Management
The consistent volume that seasoned consolidators manage typically results in strong relationships with carriers. When playing in the spot market as a supplier, sourcing carriers and fulfilling orders is exhausting. Enrolling in a consolidation program eliminates the time and energy needed to effectively manage this aspect of your supply chain. Don’t worry about chasing down new carriers at the last minute. Working with an expert consolidator streamlines communication and coordination with shippers to optimize truckloads based on your inventory needs.
Suppliers put themselves in a ready position by establishing an infrastructure that helps them to share, manage, and analyze inventory. Consolidation is a consistent, cost-effective approach to ground that infrastructure. When done right, this outsourcing strategy can greatly prepare your supply chain for seasonal surges.
For more information, visit hubgroup.com/logistics-management/consolidation-warehousing/
 Jain, Chaman. “Ask Dr. Jain: What Are The Forecast Accuracy Benchmarks In Retail?” Demand Planning, Institute of Business Forecasting & Planning, 22 June 2018, demand-planning.com/2018/06/22/what-are-the-benchmarks-in-retail-forecasting-accuracy/.
 Weiss, Derrick. “Using In Store Fulfillment to Boost Sales.” SkuNexus, Aug. 2018, www.skunexus.com/blog/using-in-store-fulfillment-to-boost-sales.