Archives September 2023

Yes, Consumers Will Spend. Supply Chain Leaders Must Prepare

As the holiday shopping season approaches, one thing is abundantly clear: consumers are gearing up to spend, and the holiday spirit will be in the air.

This anticipated surge in consumer spending is not mere speculation; it’s a trend deeply rooted in long-term consumer behavior data. Surprisingly, despite 2022’s predictions of reduced consumer spending, sales from October to December of that year soared by 8.3% compared to the previous year. Forbes reported a 9.3% increase in nonstore sales, including eCommerce, with some specific categories experiencing a staggering 20% growth.

Many retailers and etailers have pushed early access sales in September and October. Ever since the advent of Amazon Prime Day in 2015, leaders have sought to compete by offering Black Friday in July.

These insightful leadership attempts at demand shaping have reshaped the holiday shopping landscape, extending peak spending beyond the traditional Black Friday and Cyber Monday. In this context, leadership plays a pivotal role in preparing retail, eCommerce and fulfillment operations for the challenges and opportunities of Peak Season 2023.

Warehousing: Well-Prepared – Not Enough

One aspect of preparedness that stands out is warehousing. Over the past year, many companies saw slower sales than expected, which has resulted in accumulations of inventory. The reduction in imports has lessened demand for adding warehousing space. In fact, I do not expect warehousing to be a problem for Peak Season 2023.

However, it’s crucial to recognize that warehousing is just one part of the equation. A comprehensive strategy involves efficiently moving these goods to meet surging consumer demands.

The Challenge: Labor and Transportation

With warehousing under control, insightful leaders need to turn their attention to two critical elements of the supply chain – labor and transportation. In fact, I think supply chain leaders are paying scant attention to those two factors, which could pose significant challenges as we approach peak season.

The labor market has proven unpredictable, with many industries facing worker shortages. For the logistics industry, recruiting and retaining qualified workers remains a daunting task.

Simultaneously, transportation faces its own set of challenges. Escalating fuel prices and logistical complexities make securing reliable transportation more difficult. However, committing to a single transportation solution is risky. A thorough Transportation Diagnostic Evaluation (TDE) can help identify the most suitable approach. Pairing the TDE results with a robust Transportation Management System (TMS) can provide a competitive edge, allowing flexibility and adaptability when demand spikes.

Giants Gearing Up: Amazon and DHL

Recognizing the importance of proactive planning, supply chain leaders at industry giants like Amazon and DHL are addressing their personnel challenges head-on.

Amazon plans to hire an additional 7,600 workers in Nashville and a quarter-million employees across the U.S.

Similarly, DHL eCommerce has inaugurated a $74 million consolidated distribution center near Cincinnati/Northern Kentucky International Airport. This high-tech facility can process 50,000 parcels and packages an hour and unload 20 trucks an hour, streamlining the final mile delivery process. DHL has invested $400 million in U.S. operations to ensure they have the technology, labor and transportation necessary to meet holiday demand effectively – now and for the future.

Your Move: Secure Flexible Solutions Now

At this stage, you likely will not hire a quarter-million workers or open multimillion-dollar distribution facilities.

However, securing flexible labor is achievable. Companies like Task4Pros offer trained warehouse labor in various U.S. locations, with a proven track record of rapid scalability. Unlike many temp agencies, Task4Pros Pros arrive prepared for warehouse work, boasting a 100% fill rate and turnover less than half the industry average.

As mentioned earlier, the synergy of a Transportation Diagnostic Evaluation (TDE) with a Transportation Management System (TMS) is a potent option to navigate the challenges of peak seasons. These solutions can prove invaluable in handling demand spikes efficiently and effectively.

Don’t Wait for the Peak to Hit

In the race to prepare for Peak Season 2023, waiting is not an option. As a supply chain leader, secure flexible labor and transportation solutions now to avoid shipping delays and provide excellent customer service.

Turning the challenges of the holiday season into growth opportunities requires foresight and proactive planning, and Tompkins Leadership is here to help you succeed.

Business Leadership Quotes that Ain’t So

My wife and I watched the 2015 movie “The Big Short” the other night. The protagonists “future proof” their investments by betting big against the housing market before its 2007-2008 collapse. The film about the 2008 collapse of the U.S. housing bubble used an introductory quote from Mark Twain:

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

That quote really spoke to me. It applies just as much to business leadership today as it applied to the failure of the global economy and the Great Recession.

Interestingly, the next morning I went to Quote Investigators, a website that traces quote origins. They found no substantial evidence that Mark Twain ever said or wrote this remark. The earliest similar statement came in 1874 from Josh Billings, a pseudonym of the humorist Henry Wheeler Shaw. Billings wrote, “I honestly believe it is better to know nothing than to know what ain’t so.”

Departing Now: The Old Definition of Future Proof

Well, independent of who said it, the quote takes on a whole new meaning toward future-proofing your business when I add my thought: “It is not what you don’t know that gets you into trouble as much as what you did know 6 months ago that is no longer true.”

This quote reflects back to the reality that from now on, business leadership must look at “future-proofness” in a different way. The future will be a departure from the past, not a projection from the past.

I have been saying this for over 5 years now. And given COVID, Rusia/Ukraine, China/Taiwan, globalization/deglobalization, free trade/tariffs, nearshoring/friendly shoring/reshoring, hurricanes in Los Angeles/drought in Panama, inflation/interest rates, uncertain consumer demand/uncertainty of supply, value of AI or not, peak season or not, inventory overage/shortages, etc., business leaders certainly must realize that uncertainty is the only thing that is certain.

Business Leadership: Building for Success with Insight

The ramifications of perpetual uncertainty were the premise behind my 2022 book Insightful Leadership: In the context about the quote on what “ain’t so,” the insight business leaders have about the future will dictate your ability to future proof your enterprise. What you know about the past will likely dictate failure.

So, it is a good thing Mark Twain did not say what some have attributed to him. And even if he did, in today’s uncertain times he would be wrong.

What Business Leaders Need to Know – By Mark Twain

So, not to spread rumors, but I recently met a retired riverboat pilot on a paddle boat going down the Mississippi River. His complexion was fair. His eyes were blue. He wore a white suit and a bow tie. He sported a striking, bushy white mustache and goatee.

He told me: “The problem today ain’t so much the things that a person thinks he knows, it’s the things he thinks he knows that have changed, and the person does not realize they have changed, and they ain’t no longer so.”

Did I dream that? Seems I remember the person’s last name was Twain. Don’t believe I heard his first name. Maybe I need to go back to Quote Investigator?