Dealing with Supply Chain Peaks and Valleys
Online shopping was made for me. I do not like anything about traditional shopping (the time, the money, the effort). Therefore, online shopping is a dream: with just a few clicks, it is done! The delivery method is often by UPS and occasionally FedEx. That is how I did 90% of my holiday shopping this past year. I was in heaven!
Many of you may remember that the 2013 Holiday Season is when UPS could not keep up with the volume; many packages were delayed and did not make it on time for Christmas. Retailers offered free, speedy delivery and UPS was not up to the challenge. (See our blog posting, Learning from UPS).
As a reaction to that, this year UPS increased their resources and delivered the goods on time, but at a cost. This week’s article, UPS Communicates Perceived Disappointing News to Wall Street by Supply Chain Matters' Bob Ferrari, outlines just that.
The volume of packages was in line with UPS' expectations but their costs were higher, especially during those peak periods. They reported being $200M over budgeted expenses, due in part to higher vehicle rental and staffing costs.
As a result of this experience, UPS is reviewing their practices. While retailers are offering promotions and free shipping, UPS may alter their procedures instituting different fee structures for peak shipping periods.
Does your organization do anything different for pricing during peak periods? Do you offer deep discounts during slow periods?
Share your thoughts by commenting below or tweeting us @BuyersMeetPoint.