Navigating Peak Season: How Daifuku Intralogistics America Optimizes Operations for High Demand

'Tis the season to be... busy.

Yes, as we approach the holiday season, retailers also reach peak season. According to a forecast by Deloitte, we’re estimating a “2.3% to 3.3% increase in total 2024 holiday sales compared with the same period in 2023” and a “7% to 9% increase in 2024 holiday e-commerce sales.” That is steady growth that businesses and warehouse operations will have to account for in peak seasons to come.

It begs the question: Are you ready for the increase in demand?

As the world's leading provider of automated material handling solutions, Daifuku Intralogistics America Corporation has helped companies address their peak season challenges and is standing by to help you streamline efficiencies in your warehouse for future peak seasons.  Our specialists in consulting, engineering, design, manufacture and installation of logistics systems, and material handling equipment can help your warehouse optimize its conveying systems, sorting and picking systems, storage systems, transport systems, and material handling tools.

Read on to learn more about how we can help you optimize your operations for high demand or contact us today for more information.

Why You Need to Take Advantage of Peak Season

Perhaps the biggest reason to take advantage of peak season is its high sales potential. Beyond that, there are several other reasons why businesses should be optimizing their operations for the peak season. For instance:

• There’s opportunity to earn new customers and expand the customer base.

• Brand awareness (and sales) can be increased through strategic marketing plans.

• Cross-selling and upselling that may not be as feasible during other parts of the year can allow brands to sell higher-priced items or more items in total, which can further increase earned revenue during the period.

It's imperative to ensure you're practicing good inventory management so you can adequately meet increased demand and don't risk lengthy product delays and unhappy customers. It's crucial it to have your warehouse operations optimized so you're easily able to locate and ship products.

If you properly optimize your operations for high-demand times, it's likely to result in earning a competitive advantage and further establish your business as a leader in its market or industry. The ability to handle high volumes of product, maintain quality expectations, and meet or exceed delivery deadlines can set your brand up to outperform the competition, earn more revenue and further grow your customer base. Learn more about how Daifuku Intralogistics America is poised to help you achieve these goals in the next section.

3 Keys to Optimizing Operations During Peak Season

Some of the most successful retailers generate up to 35 percent of their annual revenue in the fourth quarter of the year. However, various challenges must be overcome to accomplish this. The labor market continues to be a challenge, and it's becoming more difficult to find seasonal help to meet increased demand. Daifuku Intralogistics America recommends three key fundamental practices to handle your peak with confidence and efficiency.

1. Warehouse Design

Where do you start within your warehouse to help optimize your operations? It all starts with a good warehouse design - and determining a good warehouse design starts with knowing what to expect when it comes to your expected peak sales volumes and how that increase impacts order fulfillment. For instance, the following questions help influence warehouse design:

• Are the same products being picked during peak season compared to non-peak season?

• Do the products that are being picked need to be picked differently?

• Do adjustments need to be made to accommodate inventory shifts during the peak season?

Daifuku Intralogistics America works closely with our customers to analyze historical data and to develop a design basis for future years based on projected growth. The specific warehouse design features will depend upon our customers' specific needs.  A few examples are as follows:

• e-Comm client with a surge of short lead time orders during peak – Many clients will alter their service level agreements to their customers during peak to help alleviate the surge.  However, these surges still require careful planning inventory, availability of labor, and right sizing of material handling systems.  It is particularly important to size your forward picking locations adequately as you want to have the inventory in a pickable location and not constrained by the increased demand on your warehouse replenishment system.

• Store Distribution – Store distribution may have the flexibility to spread the peak demand over slightly longer periods than does e-comm. However, there will continue to be an increase in flow that automated storage and retrieval systems and conveyor systems will need to be appropriately designed with adequate buffers to handle this increased flow.

• Pre-picking and pack and hold – Some of our clients can look ahead and spread demand across multiple days or shifts.  There are options to pick orders and hold them in temporary storage buffers.  The design of the buffer size is key and will have to be balanced versus equipment capacity.  The extra cost of space and storage for temporary buffers may be a savings when compared to the investment in material handling equipment if you were to size your system for the daily peaks.

There are several alternatives that we will consider when developing a warehouse design.  Some considerations may include the following:

• Change how items are picked - As demand grows, a product may shift from needing to be picked from a lower-demand slot like shelving to a higher-demand slot like carton flow or pallet flow. We want to minimize replenishment in any picking system while balancing the inventory volume in the pick area. Having system flexibility to handle changes in demand from a few cases a week to a few pallets a week is key. We want to make sure the demand for the products matches the picking medium it is placed in. Putting a fast-moving product being picked on a shelf as the space/replenishment needed would have a negative impact on labor.

• Adding Automation – Investing in automated solutions to help with peak requires a variety of strategies to ensure an ROI.  Automation can provide that added boost during peak season to hedge against labor shortages and give you the ability meet your SLA(s).  You can leverage planning and your Warehouse Management System to ensure that you maximize the capacity of your automated solution.  ASRS shuttle technology, unit sorters, and Autonomous Mobile Robots are a few technologies that can be considered, scaled, and tailored to your peak demand profile. Daifuku Intralogistics America can help you design a fully automated or semi-automated solution to match your unique requirements.

2. Equipment Planning and Preparedness

After Daifuku Intralogistics America helps assess changes that should be made to your warehouse and incorporates the right solutions into the warehouse environment, then we help our partners prepare for the peak season that's in front of them. Some of the ways we aim to accomplish this include:

• Design Review and Audit – We work with our clients to check system performance, workflows, and make sure that the system is on track to meet throughput.

• Operations Planning – Peak season planning should include all functions involved in supporting the warehouse systems.  This includes both equipment maintenance and software support.

• Lessons Learned – It’s always important to tap the experience of design and operations teams to review lessons learned from previous seasons or from experience at other sites.

• Mini System Tests - Perform mini systems tests that run parts of the system at peak volume to help verify that the solution will be able to handle a high volume of product.

• Understanding the live system data – It’s important to utilize the system data and dashboard tools provided by software like Daifuku’s Dainamics WES offers to understand how the system behaves under stress.

3. Equipment Maintenance and Support

Proper equipment maintenance is integral to ensuring reliability, efficiency and longevity of the machinery helps protect your investment. Preventative maintenance is critical to ensure a smooth operation during peak season when your material handling equipment is running at its maximum speed and cycles.  Daifuku Intralogistics America is committed to working with our customers to ensure optimization of system performance throughout its lifecycle.

Remote Support - At Daifuku Intralogistics America, we offer a Remote Support service desk and aftermarket support to ensure that our partners always have the highest level of support, whether it's the peak season or just any time of the year. Our Remote Support center is staffed 24/7x 365 with multiple disciplines and senior people to address problems whenever they occur. Our aftermarket support center helps streamline equipment health checks, code audits and verifies connections to proactively address potential equipment issues before they have a chance to disrupt your busy workload.

Daifuku Intralogistics America also offers Resident System Support (RSS) – Our factory trained technicians are dedicated to maintaining the material handling equipment in our facility.  This support includes operational support, equipment repairs, preventative maintenance, and management of spare parts.

Some strategies for getting ahead of equipment maintenance before peak season include:

• Forecasting your equipment needs based on historical data, expected market trends and other data points to anticipate expected equipment usage.

• Scheduling maintenance in advance of peak season. Even during non-peak periods of the year, maintenance should always be done in a manner that minimizes business interruption.  Balance the need for maintenance with the need for maximum equipment uptime during peak periods.

• Maintain a well-stocked inventory of critical spare parts.  In the event of an issue, you want to be sure you're able to easily and quickly replace any necessary parts to reduce downtime.

• Train your staff so that they have the knowledge and skills to diagnose issues accurately and perform repairs efficiently.  

• Use advanced monitoring systems to monitor equipment health in real-time.   These tools can alert you to potential issues before they escalate.

• Design and effective communications system that facilitates communication between maintenance teams, production teams, and management.  Encourage reporting and feedback throughout your organization.

The organization that embraces modern maintenance practices will not only reduce downtime and costs but will likely gain a competitive advantage in their respective markets which is essential to thriving and navigating through a peak season.

Contact Daifuku Today

Peak season is upon us - are your operations optimized to take full advantage of the opportunity that's ahead of you? Whether you’ve struggled during past peak seasons or just to plan ahead for increased workload in the future, Daifuku Intralogistics America Corporation is here to help.

As leaders in integrated material handling systems since our founding in 1937, our solutions in conveying, storage, sorting, picking and controls have helped customers reach new heights in countless industries and markets. Contact us today for more information on how we can help take your operations to the next level and set your company up for a prosperous peak season.

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