The Christmas season delivery schedule is one of those things that while it only happens once each year, can put a dent in the reputation of the supply chain everywhere. When UPS underestimated the volume of packages that it would need to deliver on the last day before Christmas, these packages left sitting in the sorting facility on Christmas day put frowns on the faces of entire families.
Parents who were assured that (despite their lack of planning and forethought) their packages would arrive on their doorsteps in time to wrap and give as presents the next day, had someone to blame - which I'm sure they did plenty of. The children and other potential recipients of their most wanted gift were disappointed and probably blamed everyone down the chain of delivery. Certainly UPS got a good portion of the ill will if people understood that the carrier was in fact, to blame. But more than likely the bad sentiment was cast on the retailer who took the order.
When consumers take advantage of omnichannel retailing they are generally aware of one thing - the retailer. And that's exactly the point. Retailers want that recognition to begin and end with them, regardless of the path the ordered product took to arrive at its destination. With the efficiency of drop-ship orders, the retailer is likely to have never touched the actual product, and only have been marginally aware of the order itself. With that kind of arms-length approach, is it realistic to make promises that rely on the perfect performance of so many intermediaries? I think the fault and recipient of the blame for any delays probably did make its way to the proper recipients of blame - the retailers.
SCDigest put together a nice recap of the debacle faced by UPS when they were inundated by packages on the last day of the holiday shipping year. They identify one of the main factors that lead to so much disappointment and angst... competition among retailers. SCDigest said, "Retailers such as Toys "R" Us Inc. and Dick's Sporting Goods told customers they could place on-line orders as late as 11 p.m. on Monday, Dec. 23 and receive goods by the end of day on Tuesday." I'm sure these retailers only wanted to one-up their competitors who were also offering unrealistic delivery times in order to meet expectations of last minute online shoppers.
This convergence of factors is what finally lead to the over-capacity situations of shipping companies like UPS and FedEx. Is there a way to avoid this next year? I'm certain the carriers are working on their forecasts and retailers are wondering how they might be able to build a performance metric into their shipping rate negotiations. But despite the analytics and forecasts that drive the supply chain's purchasing, I'm expecting that even with the expanded fleet of aircraft making deliveries during the holiday rush of 2014, expectations will still outstrip capacity.
Is the multidimensional nature of omnichannel retailing going to be the proverbial snake eating its tail?