Festivals are a time of joy, and for the logistics industry, this joy comes in the form of higher profits. But these profits are useful only if the businesses know how to preserve and maintain good operational habits.
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The festive season is a time of extreme stress for industry players as they face the challenges posed by the sudden spike in retail.
Have you ever wondered how the logistics industry operates to bring you your festive goods as quickly as possible?
Do not worry, we are not leaving you with just a question. This blog aims to bring to you just how the fleet industry meets your high demands seamlessly.
What is the Logistics Industry? What Role Does it Play?
The logistics industry is a mega power of any country. In India alone, it accounts for5% of the GDP. To put it in very basic terms, logistics is the transferring of goods from the source to the consumer. But this ‘simple’ process has many complicated layers to its operations.
The following are the components of the logistics industry:
The lack of proper infrastructure and technology has been a massive hurdle for this sector. Manual management of such a vast industry is nearly impossible, with error-prone management garnering losses. But with time, automation has slowly infiltrated the industry. This has made logistics not only efficient but also more profitable.
This blog will focus on the transportation part of the industry as we study its operations from the perspective of retail businesses during the festive season.
Reasons Behind the Extra Pressure During Festive Season.
E-commerce plays a huge role in the shift we have seen the logistics industry go through.
Through the pandemic, people have shifted their focus to online shopping. This trend has affected the festive season as well. Businesses usually experience up to a 60% boost in their sales around the festive season. That means 60% more pressure on logistics.
This might seem like a blessing when you think about the profits these businesses make. But poor management at these times can also lead to a bad word of mouth for brands. So what are the reasons that might cause bad service?
Innumerable brands put their products on sale during festivals. This is an age-long tactic for enhancing sales and expanding clientele. As much as businesses stock up on products pre-sale, staying afloat on these stocks alone is impossible. Brands then have to outsource their products and this is where logistics come into play.
When the world is shifting and becoming technology-driven, eCommerce has also become a favoured medium of purchase for many. The pandemic has also played a huge role in this hike. Black Friday is a good case to observe the above scenario. The sales brought during this period forces businesses to prepare months in advance. In the Indian context, online Diwali sales by online marketplaces are a similar example.
As we mentioned above, festivals are a time when people like to buy all the luxuries they had been waiting for. What does this mean, commercial businesses have an influx of way more orders than normal. This sudden surge can make or break a business. Festivals also mean a time of house decoration. And this in turn leads to the purchase of decoration goods.
Gifting and Donations
Major festivals we have mentioned in this blog are often associated with the act of giving. Be to coles ones, or as an act of charity. But you will give what you buy right? Every household during festivals buys some or the other This also contributes to the increased sales during festivals.
Challenges Faced by the Logistics Industry During Festive Season
Now we have discussed what puts the logistics industry under pressure when festivals are approaching. But what does this pressure entail? Why do businesses have to go out of their way to make changes to their operations?
Let us look at a few reasons behind this:
Increase in Transit Time
Festivals are a time when people travel to be with their families and friends. This means that the terrestrial transit of goods is way more difficult than normal. Not only that, but many regions close off their highways for the safety of private vehicles on the roads. Ultimately commercial vehicles are left with no other choice but to divert their routes.
For fleets that manually plan their routes, keeping track of closed regions is nearly impossible. But unfortunately, errors right at the planning stage can waste not only time but also resources like fuel. For businesses in charge of perishable goods, the small shelf life is already an added disadvantage. Losing time to such errors can lead to irreversible damage.
Higher Road Congestion
More people on the road means less space for commercial vehicles on the roads. We saw how some areas become restricted for delivery vehicles during the festive season. The remaining roads open for their movement are then burdened with the travel of all such vehicles. Ultimately there can be heavy traffic on these routes, costing businesses both their time and productivity.
During festivals, several e-commerce businesses have to invest in new fulfilment centres for better inventory management. This means higher demand for an experienced workforce as well. If the profits are high, then so are the stakes.
Vehicles supplying to several locations also require well-planned routes keeping their density in mind. Overloading vehicles is a hit not just to their hit but also causes higher fuel consumption.
The supply chain runs on a very tight schedule during festivals. While on any other day of the year, customers might let minor delays during deliveries go. But when important festivals are in question, delays can be twice as harmful to a business’s reputation. Sending customers their orders after the festival has already passed defeats the entire purpose of the purchase. This can shrink a business’ clientele.
Tackling Issues Faced by Logistics During Festivals
Every problem has a solution, So what do you think is the solution to the issues we have discussed in the previous section? Planned logistics play a major role in the optimisation of the industry, especially around the time of festivals.
What are the stages to having planned management for the festive season?
Stage 1- Pre-Festive Season
Fleet managers have a lot of responsibility as they head towards the festival season. While the process of coping with this increase in demand may seem quick, the preparation that goes behind it takes up to months on end.
For example, fleet businesses have to start their planning as early as September for the Black Friday rush in November. The preparations involved here include:
Vehicle Maintenance: Vehicle downtime can be a hit to a business’s productivity. The festive season means an influx of tasks for the fleet. That also means that every vehicle operating under the fleet is saturated with tasks. When a single vehicle is unable to perform well, the other vehicles that are already running at maximum capacity have to step in and take on more work, negatively affecting their health as well.
Fleet Management Software: Automation is the answer to time efficiency issues. Businesses need to invest in a fleet management software system to ensure that their operations are smooth and optimised. Mistakes during such a time-sensitive situation can not just lead to losses, but also affect the fleet’s reputation.
Data Analysis: Understanding the fleet’s operations and its shortcomings is the only way fleet managers can take any action for optimisation. But how? Through the reports presented by the fleet management system of course. This helps businesses prepare for the festive season, reducing the margin for errors on the road.
Resource Expansion: Businesses when preparing for a surge in sales will have to expand every aspect of the logistics related to this increase. Be it warehouses for storage to vehicles for transportation Investment at the pre-season time is a smart move. More demand for these commodities during festivals can lead to higher prices. This is why it is said, “A stitch in time saves nine.”
Stage 2: During Festivals
You might think, now that the preparation has ended and there is nothing much to do during the festive season anymore. But that is not true! You have barely grazed the tip of the iceberg. The next stage is execution. As much as you try to make your operations simpler and more efficient, facing challenges is inevitable.
So what can you as managers do to ensure the profitable functioning of your fleet? Here is a list:
Planning Routes: Drivers need to have assigned paths for their deliveries, whether from the seller to a warehouse or between different storage units. This is where route planning solutions of the fleet management system step in. It simplifies this process and all the managers have to do is add halts and sequences to the system. It also helps eliminate route deviation.
Optimising Driving Practices: Drivers have immense responsibility on their shoulders. This is why the vehicle tracking software allows managers to keep a track of their activities. Any events like abrupt braking and overspeeding can endanger the consignments and vehicles which then translates to monetary losses. Thus, managers can ensure ethical driving practices and safe fleets.
Live Tracking: Well, all this effort for what? To keep the consignments safe right? Then why leave any chance for assets to get misplaced during transit? The asset tracking solution allows fleet managers to access their goods’ real-time location using a GPS tracking system. This means there is no risk of misplacement or theft!
Stage 3: After the Festive Season
This one sounds odd, continuing the management process even after the season has passed? Festivals are not a one-time affair though. This is why even after the season has passed, preparations to optimise the next season are very essential. Managers save time during the next festival that might have been wasted doing the entire process from scratch this time round.
Curating reports is a feature of fleet management software. It allows managers to view the history of their fleet for up to six months. Thus, saving records for the current festive period will aid the data analysis step for the next festival. It will also help managers train their drivers according to the challenges they encountered previously. Ultimately, the overall quality of your business can soar.
Coming to an End
Phew! That certainly is a lot of work. But nothing automation cannot solve. Investing in a fleet management system can help your festive season to be both efficient and profitable. It can transform your operations because fleet managers deserve to spend stress-free festivals as well.
TrackoBit is a match made in heaven for your logistics business. The dynamic solutions it has to offer can be customised to fit your requirements. So get a demo today! After all, Christmas is not too far.