For manufacturers and distributors, consumer demand during the holiday season is typically very predictable. This season, however, the consumer demand is likely to be a little different, much like everything else in 2020. The holiday season is always a time of increased consumer demand, but with the supply chain already in a volatile place due to everything that this year has already brought, to say consumer demand will be unpredictable this year is an understatement.
Consumer Demand Will Be Even More This Holiday Season
Amazon, for example, stated that operating income for the last three months of the year could be anywhere in between $1 billion and $4.5 billion, which of course is a huge range. Michael Castagnetto, president of Robison Fresh, said about the upcoming season, “This will be one of the most challenging and unpredictable shopping seasons our generation has seen, which means food retailers need supply chain agility to help them react in real-time to changes in demand.”
More people will be staying home for the holidays, which will increase demand for groceries, in particular. For this holiday season, C.H. Robinson is projecting a nationwide shift of $250 billion from food services to eating at home.
The Centers for Disease Control and Prevention have advised everyone to have smaller gatherings for Thanksgiving, for example. John Stanton, a professor of food marketing at St. Joseph’s University, predicted, “Thanksgiving is going to be a bigger shopping event than previously. Now you’re going to have all these smaller meals. Well, they’re all going to have one can of cranberry sauce, and they’re probably all going to make mashed potatoes. So there’s likely to be more total sales than you would normally expect from the Thanksgiving season. You’re going to have more total meals being prepared.”
This year, how can manufacturers and distributors prepare for the unpredictability and the unforeseen seasonal trends? How can manufacturers and distributors plan for labor costs, costs of raw materials, etc. without being able to have reliable metrics from historical data? How will this unpredictability affect an organization’s planning, scheduling, and labor management?
How Manufacturers and Distributors Can Approach Labor Management
As manufacturers and distributors prepare to meet this unpredictable demand, one of the biggest challenges they have to face is the availability of labor. There are many reasons for this: the difficulty of attracting younger people to food manufacturing jobs as well as the decline in the working age population in the United States.
So how can manufacturers and distributors prepare for this? How can they adopt controls around planning, scheduling, and executing labor management? How can they work around the labor shortage in food and beverage manufacturing specifically? How can they retain manufacturing employees?
Manufacturers Need to Introduce More Flexibility into the Workplace
Manufacturers and distributors will need to have more flexibility in general this season to address changes in demand, whether that’s unforeseen low-volume or unpredictable high-volume demands. Organizations need to take different approaches to labor scheduling and planning to create more agility.
Organizations need to be more flexible in general with their employees as well. The workforce is changing. The work ethic of Millennial and Generation Z workers looks different than the work ethic of older generations. In addition to the flexibility they are seeking within the workplace, they are interested in flexible career paths that present more opportunities for growth.
Employers may also need to re-think finding qualified workers for manufacturing positions. For example, a worker may not have as much specific manufacturing experience, but if they demonstrate an aptitude for mechanics, computers, or complex processes, they may be a good fit for the manufacturing industry.
Organizations Need to Develop a New Vision
Manufacturing as a career may not be the most attractive option to younger workers, but this doesn’t have to be the case. Workers need to see how this career path can be exciting and rewarding. The perception of manufacturing jobs needs to shift, particularly in the younger workers.
Companies Need to Focus on Operationalizing their Culture
One of the most important aspects of employee retention is creating a h3 work culture. As an organization grows, the culture needs to grow with it. Nothing is going to get your staff to be more dedicated to the work than having a successful culture. Focusing on culture is imperative for improving your business performance.
At POWERS, we help organizations to operationalize their culture. We help leaders and managers to be the demonstration of organizational values that make up a culture in ways that not only help with employee retention but also with productivity. Learn more about what we mean by operational culture.