The Christmas challenge for supply chain businesses

IN: Guides

Autumn is upon us, meaning that many businesses will now be preparing to take full advantage of what, for many, will be the busiest and potentially most profitable time of the year - Christmas.

Autumn is upon us, meaning that many businesses will now be preparing to take full advantage of what, for many, will be the busiest and potentially most profitable time of the year - Christmas.undefined

Good management and effective collaboration are absolutely key during this period, particularly for supply chain businesses - those that rely on the efficient transportation of products from manufacturers and suppliers to consumers.

If your company falls into this category, make sure you are doing everything you can to prepare for what will be another busy Christmas season.

The Christmas rush

Christmas will always be a time of increased consumer spending, but over the past few years - with the economy in the doldrums and a large proportion of the public struggling with personal finances - the festive season might have felt a bit less joyful than usual.

However, many people will be looking forward to Christmas 2014 with optimism, thanks to a stable economy, improving job security and rising business confidence, which could increase the likelihood of pay rises.

Research firm GfK's UK Consumer Confidence Index increased by three points in August, with all five measures used to calculate the score rising.

The section charting changes in personal finances over the past year rose by four points, while the part of the study covering major purchases was up two points on the month and 15 points on the year.

Research from Nielsen has also highlighted this trend, showing that consumer confidence has risen four times faster in the UK than the rest of the world over the past year.

Chris Morley, the company's leader for western Europe, said: "While much of Europe struggles with consumer confidence, the UK has cemented its position in the continent's most confident quintile, along with Germany."

Rising positivity and confidence among consumers is likely to make the coming Christmas season a particularly busy one for all sorts of organisations, particularly supply chain businesses and retailers.

A recent report from ChannelAdvisor, a provider of ecommerce solutions for firms in the retail and manufacturing sectors, showed that 86 per cent of retailers expect to increase their online sales this Christmas.

Jordan Weinstein, the company's managing director for Europe, said: "Christmas is the time of year that retailers look forward to and plan for all year long.

"As we suspected, our survey shows that retailers are planning to begin their promotions even earlier this year, with 62 per cent having started their efforts by September."

Supply chain tips and solutions

If your business is reliant on an efficient supply chain, you should be thinking about methods and strategies that will help you keep everything running as smoothly as possible during the Christmas rush.

It is easy to lose sight of fundamental principles in particularly busy periods, but senior figures in your company should always be striving to ensure that the basics are being done well.

Never forget the importance of key concepts like good communication within and between teams, workplace morale and staff wellbeing. A healthy, happy workforce is crucial for any business that wants to excel.

Another significant issue during busy times is prioritisation. Make sure your resources are allocated in a way that ensures the most important and time-consuming tasks are being dealt with first. This will help prevent any last-minute panics and guarantee that your service - whatever it may be - is being delivered as effectively as possible.

When it comes to assessing the progress and management of a supply chain, one of the best ways to do this is by using key performance indicators and metrics, which can help you track data such as the cost of storing inventory over a given period of time, the status and accuracy of your orders and deliveries, inventory-to-sales ratios, and the rate at which shipped items are returned to you.

Your business might also want to consider adopting supply chain software that is designed specifically for your industry. Other technological solutions include warehouse automation and management systems, radio frequency identification tracking and mobile platforms.

There is plenty of hi-tech support available to modern-day organisations, along with various forms of financial help that could make it easier to keep your operation profitable.

For supply chain businesses, one option is trade finance, which provides a solution to the problem of obtaining credit from your suppliers. Many companies will have experienced the predicament of having to pay suppliers up front and then having to wait to receive payment from customers.

A trade finance provider will pay your suppliers on your behalf. The purchase and sales process will be funded through a trade finance facility linked to an invoice finance service, based on your customer orders.

This could prove particularly useful for wholesalers and firms buying goods from overseas. Companies are often required to make upfront payments when making large purchases from foreign suppliers, which puts pressure on cash flows and can have ramifications for customer delivery schedules.

Trade finance offers working capital at the time the goods are shipped and to cover the period until payment is received from customers.

Such a service could help businesses take on more orders and support those that have experienced late payments, which has become a significant problem for smaller firms.

Recent research from Debt Guard Solicitors found that each SME in the UK was owed £1.3 million on average during the last financial year, Supply Management reported.

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