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ASCM Insights

Supply Chains Gear Up for an Unprecedented Holiday Season

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These past few months have put supply chains to the test, with shortages, delays and a bullwhip effect like none other wreaking havoc across the globe. As we enter the final quarter of the year, the question on many people’s minds is: Will the holiday season continue to bring extraordinary challenges? 

Given current events and the ongoing strain on supply chains, there’s no doubt that the holiday season is going to look very different from the past. “This year will be unlike anything the U.S. market has ever seen,” Chris Walton writes in Forbes, “and unlike anything it will ever see again.”

Consumer shopping patterns in the coming weeks are tough to predict, but in the article, Walton gave it a shot. First, he says Halloween has a number of problems. It’s a single day, leaving parents with no time to settle in and get comfortable with the idea of letting their children go trick-or-treating. And it can’t go virtual. Whether kids going door to door or adults dressing up for bar hopping, that doesn’t translate on Zoom. For retailers, this means significantly fewer costume and candy sales. 

Next, with people well accustomed to eating just about every meal at home — plus football going strong (albeit with strange fake crowd noise) — Walton says Thanksgiving is going to be “off the chain.” According to The Wall Street Journal, many grocery stores are already prepping for soaring food sales. Some are stockpiling turkeys and hams; others are building “pandemic pallets” of all kinds of food and paper goods. And Walmart CFO Brett Biggs says the company has even overridden its grocery-ordering algorithms to store up extra inventory. 

Black Friday will be all about e-tail. Amazon has already announced its first-ever October Prime Days, with Target following suit and publicizing deals on the exact same days, October 13-14. “In the end, Amazon will do what it always does — take massive share by giving people what they want at great prices,” Walton writes.

James Thomson, of Amazon optimization services provider Buy Box Experts, says the biggest supply chain issue this year will be, unsurprisingly, a lack of last-mile delivery capacity. “With consumers moving so many more shopping dollars online, all of those sites need last-mile delivery through UPS, FedEx, USPS, et cetera,” he notes. “While these carriers are building capacity, they likely will not build anywhere near enough, resulting in late shipments and disappointed customers.”

Finally, although online sales will dominate through December, there are always last-minute shoppers. Retailers must prepare their omnichannel capabilities for an explosion of online purchasing with curbside pickup in the few days right before Christmas. This will be great for easily accessible stores, such as those in strip malls — and another blow to traditional shopping malls. As Walton quips, they’ll be “left hamstrung by safety capacity constraints and digital front-end interfaces that couldn’t coordinate order pickups across a full-range of mall purveyors if Santa Claus himself was in charge of their supply chains.”

What’s next

I’m not so sure about that last point, as Santa’s supply chain has been a remarkable success story for decades. Who else can manage a database of more than 7 billion nice and naughty records? (Talk about big data!) What other company has a zero-emission distribution operation that can traverse the globe in 24 hours? And few companies enjoy such a dedicated and productive workforce. However, counter to the response Virginia O’Hanlon received in the late 1800s, there is no Santa Claus. There are, however, many individuals who play a large part in getting toys, gifts and other products to market.

So, in their honor, I’d like to add one more holiday to the previous list: Happy Manufacturing Day! Held annually on the first Friday in October, Manufacturing Day’s purpose is to highlight the important role manufacturing plays in our daily lives; energize a future pipeline of skilled workers; and fill the millions of high-skill, high-tech supply chain job openings. Here at ASCM, we’re doing our part with the annual Case Competition, in collaboration with Deloitte. The event gives college students real-world experience, lessons in teamwork, opportunities to practice negotiation and much more. ASCM is proud to announce this year’s winning team from the University of Houston, with runners up representing Georgetown and the K.J. Somaiya Institute of Management Studies and Research.

Now, more than ever, supply chain needs inspired and innovative young people. I encourage you to learn more and see how you can get involved with the 2021 event today.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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