Seasonality
Seasonality is the regular pattern of peaks and valleys related to the time of year.
Seasonality may be due to weather. Umbrellas, for example, sell best in rainy seasons; skis sell best in the winter. Seasonality may also be due to recurring annual events and holidays. Christmas means toy sales spike; August means back-to-school sales.
Seasonality challenges Lean manufacturers because the demand variation can be dramatic. Sales may increase three, four, or even tenfold when the busy season rolls around.
On the plus side, seasonality is predictable. That means many strategies can be used to help deal with it.
Seasonality strategies include:
- Stockpiling inventory.
This method is very costly, but generally the easiest to do.
- Hiring seasonal workers.
- Working overtime during the seasonal spikes.
- Focusing on high-value products only.
Vacation resorts do a version of this—they eliminate reduced rate options during peak periods.
- Mothballing lines.
Another costly option, but mothballing allows for a quick ramp-up when seasonality kicks into high gear.
- Augmenting/flexing product lines.
A snow shovel line may shift to producing garden shovels in the summer.
- Use low season incentives.
Use special offers to increase demand during lulls.
- Change customer behavior.
Number seven increases demand; this strategy shifts demand to compensate for seasonality.
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