Sustainable Success Begins with Planning
To make sure that products always reach retailers and consumers at the right time — whether in the case of Black Friday, Christmas or high volume marketing activities — the peak management of Arvato Supply Chain Solutions begins early on, during the planning of logistics locations or the implementation of new customer projects.
“The solutions that we plan there have to function during peak times too”, explains Stuart Draxler, Director Logistics Excellence at Arvato Supply Chain Solutions. His is one of several Logistics Engineering teams that cover interdepartmental functions like process management, lean management, operational quality control and warehouse implementation for the Arvato business units.
For as long as it is economically feasible, there is a tendency to design new assembly lines with a capacity that allows them to manage peak volumes from the beginning. Arvato relies on analyses of comparable peaks from similar time periods in order to better estimate the volumes in advance. “There are limits however. Our initial plans for peak volumes are based on figures provided by the customer, and we never know how precisely these numbers are going to correspond to reality,” says Draxler.
“It is always a bit of a balancing act. On what basis do you make preparations — according to the annual average or the peak? So, within a peak, we always have to establish margins for error when it comes to the figures provided. A classic example for customers from the high-tech industry is Black Friday, where we handle the bulk of the volume with an order-picking conveyor but then set up additional speed lanes.” This involves specially equipped packing tables that are directly supplied with products. Stuart Draxler: “These are extra production lines for single-item orders: for example, if the customer always orders a game console and the same game. That’s put together on these tables and, from there, it’s packed on shipping pallets.”
The members of the Logistics Excellence team do the bulk of the preparation for predictable peaks in the high-tech sector, such as the Christmas period, between January and August. “That’s enough time to prepare properly for these peaks and the impact they will have on our infrastructure, IT and system functionalities. It also allows us to do testing,” says Draxler. This preparation also includes formulating contingency plans so that work can continue in the event of emergency situations such as the failure of servers or conveyors. More difficult are unforeseen peaks, for which only minor IT system changes are possible. Small matters are easy to accommodate. On the other hand, revising an entire storage strategy requires much more effort and takes about three full months.
However, these are demands that Arvato Supply Chain Solutions has always been able to meet. “Our strength in peak management is primarily based on our many years of expertise in ramping up businesses and on the experience of our employees, who simply know what typically happens in a season,” says Draxler. “That gives us the ability to fulfill the operational requirements, and it also allows us to immediately judge what works in practice and what doesn’t.”