Ramadan Report — A Logistics Manager’s Guide
You might have heard about shopping holidays like Black Friday Sale, Christmas Holiday Sale, New Year’s Sale, but do you know that Ramadan is one of the major shopping events for Muslims worldwide?
In this article, we are going to discuss major problems and their solutions related to Logistic Management during the time of Ramadan. So, if you are an in-house manager, a logistics service provider, or just someone curious to know how Logistic Managers deal with logistics during Ramadan, keep reading.
Ramadan is celebrated worldwide. Over 1 billion Muslims from the Asia Pacific region observed Ramadan in 2020. This festival brings everyone closer to each other. People begin to join their families and friends to break their fast together.
Although it’s a festival of joy & togetherness, it increases the demand for goods among the people. This increased demand leads to logistic mismanagement issues, which most logistic managers find difficult to manage.
This precise guide will help you understand how Ramadan affects the behavior of buyers worldwide? Subsequently, we will shed light on the best practices for logistic managers during the Ramadan period.
How Ramadan Affects Consumer Buying Behavior?
A report published by Statistic Research Department shows that around 58 percent of consumers planned to buy gifts, and approximately 46 percent used their smartphones to research online for gifts. Also, 59 percent of consumers said that the introduction of VAT will influence their spending habits.
As stated earlier, Ramadan is a festival of togetherness. People tend to shop extensively during this time. Apart from consumer behavior, the social and cultural aspects also play an important role in the overall logistic market worldwide.
The holy month of Ramadan, which eventually leads to Eid-al-Fitr is the busiest time for businesses around the world. People tend to bulk-buying which causes an imbalance between demand-supply.
Let’s see some illustrations to know more about Consumer Buying Behavior during Ramadan.
About 41% of buyers in the UAE depict that they spend more than usual during the time of Ramadan. Let’s look at the following graph to know further;
In 2020, the logistic supply chain was highly impacted due to the Coronavirus Pandemic. Let’s witness this impact with the help of one graph that depicts the data from 2017 to 2020. Retail shopping declined 35% in 2020 due to the amid pandemic.
Overall, the market has started observing a similar impact as before 2020. And, we can expect a high demand for shopping. With this, let’s move further with our next section.
What Does It All Mean for Logistics Managers?
We have already discussed the impacts the holy month of Ramadan creates on the logistic supply chain. It’s time to dive into the best practices that a logistic manager should adopt in his routine to efficiently manage the supply-demand during the period.
Do Accurate Forecasting
Firstly, you need to forecast the demand which can happen this year. Forecasting about upcoming demand for products and raw materials will help you estimate;
- Inventory
- Labor
- Shipment
Ultimately, during this time, you need to maintain a close relationship with your marketing team. Also, stay updated with various economical political, industrial trends, and factors that might interrupt your forecasting & planning.
Pick an Appropriate Inventory Planning Strategy
Taking your current labor resources, warehousing capacity, and projected demand, into consideration, there are two ways that you can take to plan your inventory for Ramadan.
First Way: Purchase Later
In this way, your inventory stays up at the time when the buyers start shopping (during the time of Ramadan).
Second Way: Purchase Early
Yes, you guessed it right. This way consists of stocking inventories before (>2 months) Ramadan.
Take Shipment Emergencies/Delays into Account
It doesn’t matter which way you choose. Time always carries a huge risk of delays. We all understand that during this time, even a slight delay can cause a great impact on the overall sales and revenue of your business.
You should always keep a backup plan while choosing any plan. Let’s tell you the important things you should do during Ramadan time to tackle delays.
Communicate Clearly When Handling Stock-Outs
Stock-out can happen, you should take this into mind from the time of planning. Although it happens quite often, you can minimize the risk by implementing a few best practices like forecasting the demand, better understanding of the requirement of labor, and warehouses.
Ending Note
For all logistic managers, Ramadan is the best time to test your logistic management skills. It provides you the playground to test your positioning and conversion opportunities. You should make good use of this holy month to elevate your business acumens.
Finally, we would recommend you begin your shipment at least before 2 weeks of Ramadan.
