Post by Ferag Solutions

The TikTok effect: when a product goes viral overnight, the fulfillment operation that was not designed for it pays for it. In beauty and healthcare, demand volatility has a new driver: social media virality. A product can go from steady baseline volume to 10× demand in 72 hours. The fulfilment operation that handles it is the same one that was processing yesterday's standard orders. Most operations respond by adding labour. More pickers, more packers, more shift extensions. The throughput problem gets solved. The cost problem does not because the cost of processing one order at 10× volume with emergency labour is dramatically higher than at baseline. The fulfillment operations that handle viral demand moments without the cost spike are not the ones with the most headcount on standby. They are the ones where the system was designed to absorb volume variability without absorbing proportional cost variability. That design starts with one question: what does it cost to process one order at baseline volume and what does it cost at 10×? If the answer to the second number is significantly higher, the architecture was not designed for the industry it is operating in. That is not an operations failure. It is a design decision that can still be corrected before the next viral moment arrives. → Download the whitepaper: the framework for measuring what one order costs at every volume level. 🔗 https://lnkd.in/dENQ5jwP #CostOfOrderFulfilment #BeautyLogistics #FulfilmentAutomation #Intralogistics #WarehouseAutomation #HealthcareLogistics #DemandVolatility