Diwali, also known as the Festival of Lights, sees a significantly high surge in consumer spending. During this time, there is an increase in demand for goods, as it is synonymous with buying and gifting. This celebration transcends borders and is celebrated globally, with the Indian communities bringing the custom to life. According to the Confederation of All India Traders (ACIT), India’s retail market reached a record trade of ₹3.75 lakh crore during the 2023 Diwali festival. Additionally, a prominent e-commerce business reported that they witnessed the highest number of customer visits, standing at an unprecedented 110 crore. While this means peak economy, the rise and shift in consumer demand puts the supply chain industry in a tough spot.
In the months leading up to Diwali, the supply chain industry gears up for a surge in demand. This festival brings business opportunities, but it also brings distinct obstacles, from a change in demand, inventory imbalance, and labour shortage, to tricky last-mile friction.
Challenges Faced
- Inventory & Storage Space Shortage:When there’s a substantial rise in demand it requires more storage, leading to a requisite for additional warehousing. This often leaves growing businesses and SMBs with inadequate storage and unable to manage inventory. Since businesses are tasked to strike inventory balance and take control of inadequate warehousing, they can opt for multi-user warehouses, use fulfillment centers, government warehouses, and more.
- Workforce Crisis:The festive season leads to labour shortage as many employees take time off to spend it with loved ones. This severely affects the business’s ability to meet soaring demands and causes disruption at every stage. Thereby, causing delays in production, limiting operational capacity, and affecting the overall operation.
- Unpredictable Demand Trend:Diwali shopping landscape presents different trends. While clothes, garments, and are the most sought-after, there is also demand for personalized gifts, gadgets, home decor, automobiles, as well. Last year, the spending was highest on food and grocery, textile, and jewellery. This year, there was a surge in electronics, eco-friendly products, home furnishing, and appliances.
- Last-Mile Friction:During this gift-giving season, there are often hiccups at the last mile despite businesses offering same-day or next day delivery due to unforeseen circumstances, regardless of planning. When there are surplus orders, the final stretch hits a roadblock and often fails to seal the deal with respect to on-time delivery.
Ensuring Efficiency
- Implement Robust Demand & Forecast PlanningDuring the festival, spending picks up but there’s also a shift in customer demand. To combat the unpredictable challenges demand and forecast planning are imperative. Companies need to align and implement robust strategy to analyse trends, economic factors, and consumer preferences using accurate and real-time data for a successful Diwali supply chain management and meet customer expectations.
- Use Technology-Enabled SolutionsWhile the surge in customer demand brings challenges, it is also a massive opportunity to use cutting-edge technologies. These modern innovations can be a lifesaver in helping maintain the flow of supply and demand during the rush. Several businesses have already leveraged technologies to meet the festive season demand using machine learning models and algorithms to forecast demand for SKUs, pricing recommendations, assess product quality, drive assortments and optimise logistics.
- Optimise Warehouse & Inventory ManagementThis could be the key to fulfil Diwali orders accurately and on time while keeping the cost in check. Since people can make mistakes, you can reduce the chance of errors and create a smoother flow of goods. Technology plays a big role in this process- it can analyse datasets and trends to predict customer demand to maintain the optimum inventory level. It can also solve various warehousing issues, suggest floor layouts, and ensure that the products are moving as they should.
- Temporary WorkforceWorkforce shortage may perhaps be the most significant challenge faced during the Festival of Lights. And to keep running things smoothly during this peak season and fulfil requirements, companies have started hiring temporary workforce. Since the manpower should be skilled to handle the workload, organizations should recruit the talent before the festive season and equip them with the necessary training.
- Optimize TransportationAdapting technology to optimize last-mile routes can ensure timely delivery and help meet customer demand. Tech like AI/ML can map out transportation routes and provide the delivery person with the most apt route to streamline the transportation workflow.
Addressing the Diwali Surge with 3SC
Meeting demand is of utmost importance for businesses during Diwali. 3SC can help you make the most out of the surge with our AI/ML-powered end-to-end supply chain platform, SCAI. It offers accurate demand forecasting and valuable insights to optimize inventory, predict trends, optimize transportation, and elevate operations. Additionally, iTMS offers end-to-end transportation planning, settlement, and execution platform, that helps with enhanced on-time deliveries and prevents planning bullwhip effect. Request a demo today!
