When does peak season hit you most severely? Depending on the industry, it can strike any time of year and bring extreme supply chain challenges with it! In a sense, it’s always peak season somewhere. While retail will have its usual surge in demand starting in late summer with back-to-school, Black Friday deals in November, and the final holiday push in December, the home fitness industry usually soars into demand in the new year and spring, with thousands renewing their commitment to health and well-being at the start of the year.
Navigating Peak Season and Supply Chain Challenges
The key to keeping pace during peak season is to anticipate and prepare for the surge before it becomes a problem. More importantly, operations need to remember they are not an isolated entity. Their supply chain network determines their efficiency, it takes a series of partners all working in conjunction to ensure all the pieces move as they should, throughout the chain. Different technologies and strategic solutions can help operations stay ahead of the curve, but first, it’s important to understand seasonality across industries.
Seasonal Peaks Across Industries
Understanding seasonal changes across industries will help operations keep pace and prepare for what may come down the line. In this section, we’ll break down what supply chain challenges certain industries may face.
1. Heating and Cooling (HVAC)
As temperatures soar during the summer and dip in the winter, so does the need for more air conditioning services. In 2024 alone, over 150 million people were under heat alerts in the US in July, with temperatures above 100°F on the East Coast and in the Midwest. This means the demand for air conditioner repairs and replacements was on the rise. Aside from needing specific equipment, HVAC companies need to arm themselves with enough labor to perform the repairs and needed maintenance throughout the year, especially during peak summer and winter months.
The same goes for heating, which during harsh winter months poses its own set of challenges. Insufficient heating can result in uncomfortable indoor spaces, and sharp cold snaps can lead to frozen pipes and water damage. During peak summer and winter months, HVAC companies must contend with:
- Increased work orders
- Installations
- Maintenance requests
- Equipment shortages
- Service delays
2. Home Fitness
The new year brings resolutions and a newfound passion for fitness. According to Forbes Health, 48% of people in the US said improving fitness was a top priority for 2024. This enthusiasm for fitness usually lasts well into the spring, and sometimes into the summer, with many focusing on getting their “beach bodies” ready for the summer months. This translates into a surge in home fitness equipment sales, like Peloton and Bowflex, from December through June.
During this time, home fitness businesses can face a variety of supply chain challenges:
- Diminishing stock/inventory shortages
- Manufacturing delays
- Labor shortages
- Rising fulfillment and shipping costs
3. Medical Supplies
From October to May, most countries in the Northern Hemisphere face the cold and flu season. The demand for vaccines, antiviral drugs, personal protective equipment (PPE), and over-the-counter medications surges. Different healthcare facilities need to stock up to meet the increased patient load while also facing the unpredictability of different flu strains and their impact on supply chain planning.
To further complicate matters, for many healthcare institutions, the fiscal year ends in June or September, prompting many to use remaining budget allocations to make bulk purchases of medical supplies, significantly impacting demand. There is also the added complexity of particular medical supplies and diagnostic materials requiring specific storage conditions, like refrigeration or controlled room temperatures. These considerations require precise coordination between manufacturers, distributors, and healthcare providers.
Common Supply Chain Challenges Caused by Seasonal Peaks
There are a myriad of other industries that face different seasonality requirements, like retail, ammunition, chimney services, and many others. Regardless of industry, they all face several common supply chain challenges that have a lasting impact on the bottom line.
- Inventory management difficulties: Seasonal peaks have a huge impact on inventory, leading to inventory management issues, from inconsistent tracking, inaccurate data, and limited visibility to insufficient order management, overstocking, and inventory loss. All of these impact efficiency, customer satisfaction, and scalability. Operations struggling to keep accurate records of their inventory will fail to meet demand or may end up with far too much stock and no storage space. Effective inventory management during peak seasons requires advanced planning, real-time monitoring, and often, the use of sophisticated inventory management systems to optimize stock levels and avoid both shortages and surpluses.
- Workforce management during peak periods: Hiring and retaining labor has been a challenge for decades, especially for seasonal labor needed during peak periods. The need to temporarily up a workforce can lead to challenges in recruitment, training, and labor cost management. Not to mention the difficulties in managing a workforce with less experience during a time of increased demand. Companies should invest in fast training programs and consider flexible labor strategies to optimize shift scheduling and labor costs.
- Logistics and transportation challenges: Transportation, warehousing, and last-mile delivery will often exceed supply during peak season, leading to bottlenecks and increased costs. Strained transportation networks and unprecedented delays impact customer satisfaction and can have a significant negative impact on goods that require time-sensitive deliveries. Businesses need to secure reliable logistics partners well in advance, consider alternative transportation modes, and employ technology to minimize delays and control costs.
- Accurate demand forecasting and planning: Consumer behavior variability and unforeseen economic conditions or unexpected events can make accurate demand forecasting for seasonal peaks close to impossible since traditional forecasting methods might not be enough. A mixture of historical data analysis, market trends, real-time sales information, and close collaboration with suppliers and distributors can help businesses better anticipate demand surges ensuring the supply chain is aligned and ready to react.
Technological and Strategic Solutions
Seasonal peaks can pose supply chain challenges, but there are plenty of ways for operations to proactively prepare themselves.
- Implementing an advanced Warehouse Management System (WMS) for better inventory control: A robust WMS uses predictive analytics to forecast demand based on historical data and current trends. With this knowledge, operations can ensure popular items are well-stocked well in advance. With real-time visibility into the entire warehouse ecosystem, a WMS allows supply chain professionals to accurately monitor inventory level, resource allocation, and order statuses from a single checkpoint enabling prompt decision-making. A scalable WMS offers greater efficiency and adaptability in that it is designed to seamlessly handle sudden demand spikes, maintaining smooth operations at all times. With functionality to help with workforce empowerment, fast order processing, performance analytics, and more, a WMS can offer operations in all industries peace of mind during the most hectic of seasons.
- Leveraging automation to increase efficiency and reduce human error: One of the many ways operations address peak season is to hire seasonal staff, but that can sometimes be more trouble than it’s worth, especially when it comes to training. Implementing automation reduces the need for a large seasonal workforce through intelligent workflow planning, or through Autonomous Mobile Robots (AMRs) that perform repetitive tasks such as picking and transporting items within a warehouse. Automation can streamline processes by grouping orders using spatial batching. By assigning orders based on SKU proximity, the number of trips to the same location for retrieval can be reduced.
- Enhancing supply chain flexibility through diversified suppliers and agile logistics practices: Relying on a single supplier or a narrow supply base can be risky as we learned during the COVID-19 pandemic. Diversifying suppliers and developing relationships with multiple suppliers across different regions can mitigate any risks associated with supply chain disruptions, like supplier-specific issues, natural disasters, or geopolitical tensions. With agile logistics, operations can reroute shipments on short notice, critical during peak season when traditional routes may be congested. Real-time tracking systems and AI-driven logistics platforms can further enhance agility by providing greater visibility and enabling faster decision-making.
- Utilizing data analytics for improved demand forecasting: Technology has enabled operations to analyze large quantities of data to generate more accurate predictions. By using big data, machine learning algorithms, and artificial intelligence to analyze not just historical data, but also real-time information from social media, market trends, weather patterns, and economic indicators, operations can develop more precise demand forecasts, allowing them to better align inventory levels with expected demand.
Conclusion
Seasonal supply chain challenges are inevitable across industries, but they don’t have to be overwhelming. By understanding the unique demands of your industry and implementing advanced technologies and strategic solutions, your operations can stay ahead of the curve, ensuring efficiency and customer satisfaction during peak periods.
Whether it’s leveraging a robust WMS, adopting automation to reduce reliance on seasonal labor, diversifying suppliers, or utilizing data analytics for precise demand forecasting, proactive planning is key. Tailoring these strategies to the specific needs of your industry will help you navigate the complexities of peak seasons with confidence, maintaining smooth operations and a resilient supply chain. If you’re looking for ways to enhance your supply chain without breaking the bank, we can help. Trust us to recommend a straightforward and unbiased solution tailored to your needs, no more, no less. Give us a shout, and let’s see how we can make your supply chain your differentiator.