While most of the working world sees the dog days of summer as a time to kick back and relax, these same days mark the launch of the busiest season for distribution professionals.
The dog days—named for the reappearance of the Dog Star, Sirius, in the early morning sky—represent the warmest part of the year in the northern Hemiäphere. And appropriately, for shippers, especially those serving the retail marketplace, it's also the time when the shipping cycle really heats up.
It's interesting to note how businesses upstream in the supply chain from retail outlets are perpetually out of sync with the calendar. For companies sourcing offshore, for instance, the Christmas shopping season starts shortly after the last of the tinsel and ornaments have been packed away for another year. Transportation gets booked for late summer and during the opening days of the school year to ensure holiday goods move through the supply chain in a timely manner. The back-to-school clothes now on the store shelves—well, they were likely on the move even before summer camp opened.
Many retailers make 25 to 40 percent of their annual sales during the Christmas shopping season, according to the National Retail Federation. So planning for the timely delivery of goods into the stores is a crucial year-long process. (And this year, tightening capacity in the trucking industry may mean shippers who don't have their transportation in order by now will be muttering "humbug" before long.)
Despite their best efforts, distribution and logistics pros have yet to force the distribution calendar more in line with the real calendar. Try as they might to slice an hour here or a day there out of cycle times, finished-goods inventories have yet to show much improvement. In a study released earlier this year, Ohio State University researchers found that between 1979 and 2001, only four of 14 industries showed marked improvement in turnover of finished goods (inventory turns actually declined in another four). The cause is a matter of speculation—is it suppliers' tendency to add inventory to meet retailers' performance requirements? the proliferation of SKUs? outsourcing's tendency to create additional layers in the supply chain? Whatever the reason, the result is that Christmas in the DC still comes when Sirius pokes its snout around the summer sun. So let me say a timely Merry Christmas.
