DC Velocity - May 2017

react to changes and make sure products
reach consumers on time.

When retailers and LSPs discuss those forecasts, they should review near-term key performance indicators (KPIs) and long-term business outlooks, as well as discuss the impact of business initiatives such as product launches, store openings, or sales.

For example, if a retailer forecasts in late April that it will have 30,000 orders in May, but its marketing department then decides to run a 30-percent-off sale, the retailer should make sure the fulfillment center knows about the change. “[Retailers] may not be able to fix mistakes in forecasting, but they can relax the SLA. After all, they would have the same problem if they ran their own facility,” Moore said.

As for when retailers should bring partners into the planning process, the earlier the better, said Brent Hudspeth, vice president of transportation management at Transplace, a Dallas-based third-party logistics service provider.

Between the rise of omnichannel com-
merce and the shift from brick-and-mor-
tar stores to e-commerce sites, consumer
demand can change overnight, making
forecasts irrelevant. “Our clients allow
us to come into their planning process,”
Hudspeth said. “Instead of just being sent
purchase orders or store delivery data for
the next week, we need to be in the plan-
ning process for the next two, four, six, or
eight weeks.”
To minimize the need to hire addition-
al carriers at the last minute, Transplace
uses computer analytics to run different
scenarios with each partner, Hudspeth
said. Using its transportation management
system (TMS), the company models the
impact of proposed changes to help find
the optimal balance between cost and ser-
vice. For example, the modeling would
allow clients to see what would happen
if they spread shipments over five or six
weeks instead of two, staged certain inven-
tory in transit, used cross-docks to handle
spikes in demand, or changed routes to
run through Charlotte or Orlando instead
of Atlanta.

STAY FLEXIBLE

That willingness to update forecasts and
make changes is crucial in an era when
do everything,” Everett said. “So we
use task-specific training. We bring
people in and train five of them to
do receiving, five to do packing, five
to do shipping, and five to do basic
prep and dock cleanup or whatev-
er’s needed.”
The increasingly tight labor
supply means warehouse manag-
ers often find they are competing
against each other for the same
people, said Spencer Moore, execu-
tive vice president of sales for Speed
Commerce, a Richardson, Texas-
based provider of omnichannel ful-
fillment solutions.

To land the best employees, ware-
houses are offering signing bonuses
and boosting pay by two or three
dollars per hour, Moore said. Across
the industry, DCs have started peak
season hiring earlier in the year
and are offering incentives like free
lunches or raffling off a television
set. Some are even busing in work-
ers from neighboring cities while
feeding them breakfast and dinner
during the commute, he said.

KEEP AN EYE ON THE FORECAST

Whether an LSP plans to cope with the surge by hiring more labor, renting additional warehouse space, or reserving extra trailers, an accurate business forecast is critical to staying profitable during peak season, said Moore. “Every company does forecasting a different way.

We require a forecast every month,
with updates every week,” Moore
said. “[Retailers] need to treat us
like we’re an extension of their own
business, which we are.”
Forecasts are a critical part of ser-
vice contracts, which often include
service-level agreements (SLAs),
such as a pledge to ship all orders
by 2 p.m. the same day they’re
received, he said. By collaborating,
retailers and fulfillment centers can