Scaling up 3PL Operations for Holiday Fulfillment

  • 23 May 2024
  • 6 Min Read

As the holiday rush draws to a close, it is time to assess the performance and the strategies adopted for holiday fulfillment operations. During the holiday season, pressure on eCommerce for supply chain expansion doubles due to high demand, so taking stock of what went by is a smart decision.

Outsourcing some of the operations of the supply chain is a strategic move for scaling operations. The annual boom in the demand gets sorted out and optimizes order fulfillment. Partnering with third-party logistics or 3PLs for warehousing, inventory management, and shipping operations during winter months reinforces strategies and makes smooth cruises all through the peak holiday season.

Need for Capacity Planning for Holidays

The holiday season is the time when there is an influx of customers, who look for quick delivery in terms of both quality and quantity. They do not have the patience to wait and any delay means loss of orders. If an eCommerce retailer is not geared up for the onslaught of high volume in demand, they might lose business to their competitors. Order Fulfillment Growth comes with its own set of challenges and opportunities, and, of course, no business would want a system to fail during this time of the year. However, businesses would have to realize that scaling up operations can only be done if there is an understanding of challenges. Some of the common ones that could disrupt even a very well-coordinated supply chain but can be tackled efficiently by mitigation of Third-Party Logistics companies—

  • Increase in Order Volumes: During the holiday seasons, there is a need for fulfillment center enhancement as there is an unprecedented increase in the volume of orders, which could lead to several known and unknown issues.
  • Handling of Orders with Proficiency: Technology Integration in 3PL ensures there is synced communication for picking, packing, and shipping of orders. With high volume, eCommerce retailers may find it tough to execute work with high alacrity and proficiency due to a lack of manpower resources.
  • Adhering to Timeliness: On-time delivery or returns without delays and at the best cost could be challenging for any business without peak season logistics preparedness.
  • Customer Relationship: With the influx of orders, the volume of inquiries, requests, and financial assistance from the customers also increases.
  • Cost: Peak Season Inventory Management expense rises as operational costs of managing labor, shipping and other aspects of logistics also increase; this has an overall impact on the profitability of a company.

To get head-on with peak holiday season, the system that directly interacts with customers, should be error-free. APIs must be well connected, tracking software should be in place for real-time insights into the movement of orders and other related information for smooth delivery even during inclement winters.

Inventory Management Upgrade During Holiday Fulfillment

For holiday fulfillment, management should diligently look into the operation systems responsible for order processing at this time of the year. It would be embarrassing to deal with system failure due to slow hardware, poor network, loopholes in communication between various departments, and then stockouts or delays in delivering orders.

Before the rush season approaches, it is better to analytically evaluate the reason for errors during the recent peak holiday season and find cost-effective inventory management upgrades. A methodological way must be lined out to deal with dealers, suppliers, and consumers. All the stakeholders should be in sync and be able to communicate in real-time for order fulfillment. All possible methodologies should be worked out for enhanced customer experience without adding to the cost. Tech savvy customers want the best deals and prefer both online and offline shopping. For example, if a customer finds something at an online store, but prefers delivery to the nearest store, it should be made possible at no extra cost.

For order processing enhancement, outsourcing is a smart move as third-party logistics companies are teams of experts, who are pro in dealing with a high volume of orders through integration of technology.

How 3PL Providers Scale up Operations During the Holiday Season?

3PL providers are those who are experts in picking, packing, and shipping orders. eCommerce retailers usually do not have the huge bandwidth and infrastructure to handle a high volume of orders as there is a lack of human resources and strong supply chain operation systems.

3PL works towards logistics optimization as they are in the business of order fulfillment for various retailers. Third-party logistics are in the profession of managing orders at a low cost and are known for high-value performance. They offer end-to-end integration for visibility, quality, and on-time processing of orders during the holiday season. Ways in which 3PL providers scale up operations during the holiday season are—

  • Warehouse Facility: For flawless inventory management, 3PLs provide space for stocking goods at different regions and areas for faster delivery of goods as the order is generated.
  • Technology Integration in 3PL: An automated system reduces the scope of errors, and updates on carriers and shipping. An end-to-end synchronized share of data helps in smoother and quicker functioning.
  • Logistics Optimization: 3PLs are into picking, packing, and delivery of orders and know the need for logistics optimization. For this reason, their systems usually have—
    • Multi-modal optimization for live updates on order
    • Route optimization through real-time order tracking to maximize ROI
    • Improved reliability via scan-based automation, and carrier integrations and proactively avoided as well as managed any route diversions or exceptions which are quite common in the winter season owing to bad weather conditions.
    • AI and Machine Learning for segregating orders of various retailers
    • Cost efficient, as 3PLs have integrated APIs, so management of orders of the same area even for different eCommerce websites is possible. This brings down the cost both for retailers as well as the consumers.

Advatix Cloudsuite™ for 3PL Efficiency

We empower 3PL companies to be self-sufficient in dealing with orders from various clients through the integration of technology. The automated system compartmentalizes clients of a 3PL and remotely handles orders with capacity planning for holidays.

Holiday fulfillment is a litmus test for an eCommerce site to show their real worth in this competitive world, where a consumer is the king. If you are a 3PL and want to upgrade your system to handle bulk orders of your clients most efficiently…