We are getting closer and closer to one of the most awaited times of the year: Christmas. Both positive and negative aspects come with it, but, above all, great challenges for the logistics sector.
Every year, the role of logistics becomes fundamental at times of high demand such as the Christmas and summer sales, Black Friday, etc. However, in the last period, the substantial increase in logistics activity has meant that the sector has had to adapt to a new reality based on the growth of consumption.
Although it has been an under-recognised area, it is becoming increasingly relevant in virtually all global trade. Knowing how to adapt optimally to high peaks in demand is a necessity in order to be able to carry out the activity safely and efficiently.
In Spain, according to data provided by the Cetelem Observatory Spaniards spent 10% more at Christmas in 2021 than they did the previous year. The increase in demand will therefore be clear, and the entire supply chain needs to be prepared to deal with it in the best possible way.
What are the challenges this year?
High-demand seasons face a host of challenges. First, let us look at the context. Events such as the war in Ukraine and Russia have had major repercussions on the environment, such as delays in supply chain operations or substantial increases in fuel prices.
These facts, which affect all inhabitants, have a negative influence on the logistics sector, as distribution is a fundamental axis in areas such as food, pharmaceuticals, textiles, etc.
In addition to these developments, there are particular problems in the sector:
Consumer demands
Online commerce has made it easier to choose with greater precision the characteristics of the merchandise, the delivery methods, times, etc. This fact means that customer demands have increased substantially, which poses a challenge for logistics. The flexibility offered by the sector has a downside: having to deal with requests in a way that ensures final customer satisfaction.
Increase in reverse logistics
Reverse logistics is based on a return of the product from the end customer to the centre of origin. With a wider range of possibilities for product returns, a substantial increase in returns is expected. Adapting different methods that allow returns to be made to collection points or shops can help to avoid transport saturation.
Traffic
We should not forget about the locations where deliveries are made. Most commonly, densely populated cities have a greater need for parcel delivery, but there is one major obstacle: traffic congestion. Trying to incentivise in-store or point-of-delivery pick-up is a necessary action to address all the challenges the sector has to deal with.
Lack of staff
Unfortunately, a widespread problem in both logistics and transport is the lack of personnel in many key areas. Throughout the year, there is a lack of hard-working staff that influences the completion of orders and deliveries. This fact added to a substantial increase in demand can be a great challenge, having to incorporate various tools that allow a streamlining of processes, such as technology.
To prevent this from happening during the Christmas sales, a number of key aspects should be taken into account that will help prepare the company to face all the challenges without making mistakes in its processes.
How to achieve this
In order to get through times like Christmas, there are a number of things to keep in mind. One of them is to know the customer. Analysing the behaviour of demand can help to prepare the warehouse. Taking advantage of tools such as Artificial Intelligence (AI), and new systems that can simulate various scenarios such as the Digital Twin, can help to better understand buying behaviour, preferences and weaknesses in the supply chain.
The other factor that is essential and can allow for efficient use of resources is the technology. Incorporating tools that allow centralised management of resources, live stock control and real-time knowledge of the location of each package provides an optimal adaptation to the demands of Christmas shopping.
Facing a period of high demand while taking into account the challenges and opportunities of the sector allows for ease of process management.
