Managing to the Unexpected in Peak

Scott Casciato

&

Mike Honious

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Background

Scott Casciato

• Modcloth.com• VP of Service• s.casciato@modcloth.com• 412.587.4938

Mike Honious

• OHL• EVP of Operations• mhonious@ohl.com• 615.401.6482

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Providing an exceptional customer experience during peak is critical…and it’s not entirely about pick rates!

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1. Integrate operations with the promotional schedule

2. Prepare for demand “whiplash”

3. Include external supply chain partners

4. Educate and involve Customer Care

5. Take care of your team – they are the engine of a successful peak!

Top 5 demand-side themes:

Partnering with the Marketing / Merch teams will help bring clarity to critical questions – that you both have!

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Marketing / Merchandising Service

• What promotions are we planning?

• What products will be included?

• Are we thinking of out of the box improvements?

• When will we start our promotional period?

• What is our daily demand expectation?

• When will I need staff?

• How can I handle short (1 day) promotions / giveaway?

• When do I need to start / finish training people?

• What do my shifts look like?

Communication &

Planning

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Get your facility and infrastructure ready for demand whiplash!

• Prepare to take advantage of your cross-training programs and target people for tasks during super-peak days

• Ensure that your site and internal systems are “load tested” for the demand that will hit them – test all integration points

• Have onsite support ready to fix issues and plan for manual / backup processes

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Include external partners to extend your influence into the supply chain

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Parcel Carriers:

• Ensure that trailers and sweeps are closely coordinated with demand expectations

Have more capacity on “super-peak” days

Ensure there is close communication between you and the carriers

• Ensure that your promotional schedule aligns with the potential of your outbound network!

Don’t plan a promotion that will result in orders sitting and waiting for sortation

Software Partners

Ensure scalability of the systems and ability to add stations / people quickly

Make sure Customer Care can amaze your customers!

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• Educate them on every promotion and include them in all planning activities Care knows the customer better than most and can often point out

flaws in promotions to make them better

• Organize processes to enable agile editing and updating of your site and social channels Be ready to communicate and be transparent on peak issues that

will arise

• Expect the unexpected and organize thinking around how to turn those bad experiences into a loyalty opportunity Empower agents to solve customer problems – without asking

Take care of your team – every day!

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• Plan for fun Set aside budget for contests Plan for meals during crunch times

• Engage them on the floor Say thank you and set an example of diving in to get it done!

• Inform them of wins and challenges They want to know how the company is doing – set time aside for

updates – it’ll help them engage

Protect the customer experience – deliver the right product on time!

1. Know the Business… Know the Volumes2. Understand the Right Staffing, and then more3. Where are these people coming from?4. Marketing has information, so use it for picking5. Always think about more space, be flexible

Top 5 Peak Seasonality Themes

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Understand the Business Behaviors & Volume

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Forecast

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Peak Time!

* Data tracked each day for two years10

Staffing Plan - Upcoming Week

Operation: Week of :

% Mon Tue Wed Thu Fri PPH % Eff Plan PPHVolume Detail

Case Pick 70% 17500 17500 14000 17500 14000 80 100% 80Each Pick 30% 7500 7500 6000 7500 6000 115 100% 115Labeling 5000 5000 5000 5000 7500 200 100% 200

Replenishment 840 840 740 900 940 12 85% 10Auditing (Picks) 4200 4200 3700 4500 4700 220 100% 220

Wrapping 646 646 569 692 723 30 90% 27Loading 646 646 569 692 723 35 80% 28

UPS Shipping 500 500 400 500 400 100 90% 90

1st Shift 04/18/11

Volume + Engineering = Staffing

Do not over estimate your efficiency to standards during peak volumes

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Personnel Planning per numbers, per day, per department

% Mon Tue Wed Thu FriPick Staffing

Plan Staffing 47.4 47.4 45.9 47 44.6PTO

Call out 3 3 3 3 3Current Staffing 52 52 52 52 52

+/- 2 2 3 2 4Replenishment

Plan Staffing 10.3 10.3 10.4 10.4 10.8PTO

Call out 1 1 1 1 1Current Staffing 11 11 11 11 11

+/- 0 0 0 0 -1Auditing (Picks)

Plan Staffing 2.4 2.4 2.4 2.4 2.5PTO

Call out 0 0 0 0 0Current Staffing 3 3 3 3 3

+/- 1 1 1 1 1Misc (Wrap, Loading, UPS, and labeling)

Plan Staffing 9.7 9.7 10.1 9.5 11.1PTO

Call out 1 1 1 1 1Current Staffing 12 12 12 12 12

+/- 1 1 1 2 0

This is not time for vacation / PTO, but plan for Call Outs

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Plan for the “7 Day Schedule” & Avoid Burnout

A/B/C staffing: Peak schedule will have full and part time schedules with set hours for ease of recruitment, 7 days

Staffing: Leverage at a minimum two temporary staffing agencies

Plan for 30% turnover Management: Supervisors/Team Leads ratio 1 to

40 Make the easy jobs easy Stress test: Set date minimum 2 weeks prior to

peak to test peak plan

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Create an environment where replenishments are evil and picking is fast

Work with Marketing to determine, which SKUs will be the hot SKUs Fast Zone Picking for Orders containing HOT SKUs

Analyze the pick location sizes – minimize replenishment Pallet and deep case flow for fastest moving SKUs Case flow for fast and medium SKUs Shelving for slowest moving SKUs

Active pick location capacity relative to peak day demand

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Locations Type % of SKUs % of Picks Replens Man HoursLevel 3 4320 Shelving 69.95% 5% 123 3Level 2 1536 Single Case Flow 24.87% 45% 587 13Level 1 256 Triple Wide 16' Deep Case Flow 4.15% 29% 307 7Level 1 64 Four Deep Pallet Flow 1.04% 21% 11 1

97%

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Percent of Peak Demand in active locations when full

Peak day Heads0

Reduce the bottlenecks and adjust your pick zones to handle a majority of volume per day

Development of Additional Packing Stations and Utilization of Flex Space

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Scott and Mike’s Top 10 List1. Integrate operations with the promotional schedule

2. Prepare for demand “whiplash”

3. Include external supply chain partners

4. Educate and involve Customer Care

5. Take care of your team – they are the engine of a successful peak!

6. Know the Business … Know the Volume

7. Understand the Right Staffing, and then more

8. Know where your people are coming from

9. Marketing has information, so use it for picking

10. Always think about more space, be flexible 16

Questions?

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Thank you!

Scott CasciatoModcloth.com

• VP of Service• s.casciato@modcloth.com• 412.587.4938

Mike HoniousOHL

• EVP of Operations• mhonious@ohl.com• 615.401.6482

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