Peak season is just around the corner, and while most businesses focus on machines, materials, and people, have you thought about tuning up your finances? This week I look at how peak season costs—like overtime, media shortages, and increased machine breakdowns—can impact your margins more than you think. By analyzing your data now, you can gain a clearer understanding of your true gross contribution and make smarter decisions during the busiest time of year.
Transcript
Peak season is not far off and it’s tune-up time, it’s that time of the year that we ensure that every input to our business, machines, materials, people and processes are all in good shape ready for peak. But this week I wanted to talk about adding finance to the mix of your tune-up items and that’s because over the years I’ve noted that with the sheer pressure of delivery during peak and that all of the the daily pressures and stresses that we don’t look at our business models in the way that we do at other times of the year. The thing about peak season is that cost structures can vary significantly. Over time and weekend labour levels increase, sites go from one to two and three shift, media shortages mean that we pull stock at a higher cost, casual staff have lower skill levels and so rework rates increase, machine utilisation is at a higher rate therefore breakdowns are more frequent and the net result is that our margin structure is very different at peak season than what it is at other times of the year and because most businesses run themselves at the average they don’t actually know what’s really going on. So my recommendation is as we head into peak season that you grab hold of the best data that you have available in order to look at your margin structures as you push through peak in order to understand the peaks and troughs of your margin structure in order to achieve a far closer level of insight into your business and in this way you’ll avoid an unexpected surprise that might hit you at the end of your Q4 as you review the P&L. Good luck and go well.
