Guest Post: The Supply Chains Behind a Strong Holiday Shopping Season

Temple U. Professor Misty Blessley shares her insights today, on Black Friday.

The holiday shopping season is in full swing, and companies are optimistic about their year-end financial performance. Operations and supply chain managers have a crucial role. Chapter 1 of your Heizer/Render/Munson textbook explores how marketing and operations management strategies can drive bottom-line results.

Customer spending is expected to be strong this holiday season. The National Retail Federation is forecasting winter holiday sales to rise by 2.5% to 3.5% over last year. Meeting this demand requires retailers to fulfill orders when, where and how customers want. Companies are strategically using both brick-and-mortar stores and e-commerce platforms to appeal to their customers.

Supply chains have stabilized after years of disruption. Thus, core products have been efficiently moved from warehouses to retail locations to ensure availability for traditional retail customers. Additionally, e-commerce channels are poised to efficiently fulfill customer orders. Many retailers are adopting cost-effective delivery strategies tailored to peak shopping events like Black Friday and Cyber Monday. Instead of defaulting to same- or next-day shipping, retailers are spreading deliveries over several days to reduce costs and balance labor.

Amazon bolstered its labor capacity by adding 250,000 seasonal hires. DHL’s CEO explains why spreading deliveries is a viable strategy – extending shipments by just a few days allows companies to control warehouse costs while still meeting customer delivery expectations.

OM and SCM plays a pivotal role in driving both revenue growth and cost efficiency. By offering customers flexibility in choosing their preferred shopping and delivery channels, retailers enhance the customer experience and boost sales. Simultaneously, costs are reduced by managing product delivery.

Classroom discussion questions:
1. In Chapter 6 of your textbook we learn that customer expectations are the standards against which service is judged. What is the effect of exceeding expectations on contribution? (i.e., same or next-day shipping)
2. Aggregate Planning Strategies are covered in Chapter 11. Which strategies are being used by retailers to support this holiday shopping season?