Is Christmas the real "Stress Test" for food manufacturers and retailers?
As we approach the festive season, we are bombarded with beautiful adverts extolling the virtues of this year’s fantastic new Christmas culinary innovations. The issue for the manufacturers and retailers is that the huge opportunities that Christmas sales present bring with them huge challenges.
The consumer has a small window to purchase the products (especially those in the chilled and fresh categories), whilst the retailers aim to maximise availability in this window to achieve maximum revenues, putting huge pressure on the supply chain
To achieve this huge uplift in sales on new and innovative products requires a herculean effort from all parties where very often the costs incurred to maximise availability undermine the potential profits.
All parties excel at assessing and establishing the technical requirements to meet these challenges. There is a less consistent approach to truly defining how the uplift in capacity requirements for a short period of time can be met cost effectively. In general, everyone sacrifices a degree of cost control on the altar of service excellence. The process of planning the detail around temporary capacity uplifts is a complex set of compromises and requires some fairly advanced tools to achieve well.
This remains a challenge for all parties, as margins become squeezed across the sector. Only those with the tools and techniques to maximise their profits from every opportunity will, in the end, remain.