Snowstorms, Supply, And Demand

Richard Howells

As I watch the local weather reports about the nor’easter heading up the East Coast this weekend, it is quickly followed by news reports about shortages: bread shortages, water shortages, snow shovel shortages, salt shortages.

Without fail, the forecast of a snowstorm leads to a mad dash in the supermarket aisles for “essentials” such as milk, bread, bottled water, eggs, beer, Pop-Tarts, and toilet paper. The shelves are usually bare by the time I get around to buying my survival kit. But why the sudden surprise that demand has exceeded supply when we have known for days that snow is headed our way?

How can businesses prepare for the inevitable?

The challenge for businesses is not IF we get a major snowstorm in the Northeast, it is WHEN it will arrive and WHAT processes they have in place to mitigate the risk or maximize the opportunity.

Here’s how organizations can thrive in the face of severe weather and unusually high customer demand:

  • Plan for the weather forecast as well as the sales forecast. Most companies have a long-term plan that is based on historical seasonal trends, but it’s what happens in the short-term planning horizon (the next week or two) that makes the difference when weather patterns disrupt your “perfect plan.”
  • Respond and orchestrate supply by sensing and capturing real-time environmental as well as demand and supply data to ensure that you can profitably respond in a timely manner. According to the Adobe Digital Index, the Juno storm in January 2015 cost retailers an estimated $35 million in sales.
  • Monitor the location of all planes, trains, and automobiles that are carrying your goods, and track and trace inventory so you can reroute shipments and redistribute products and supplies to the neediest locations in response to short-term surges in demand.
  • Deliver integrated logistics and order fulfillment processes that can identify blockages and disruptions in the distribution network, and suggest alternate routes or modes of transport to deliver the right product at the right place at the right time.
  • Operate and manage all assets to lower risk, improve safety and quality, and improve return on assets. My snow blower broke down in the middle of a blizzard last year, and what I would have given for a preventative maintenance alert to get it serviced the week before. I can only imagine the operational planning required to keep the roads, rail, and air services functioning during winter.

As I have a connecting flight through Newark on Monday, I will make sure I have a box full of Pop-Tarts and beer at my side.

Stay warm.

For more on long-term threats to your supply chain, see our quick guide on How to Attack Supply Chain Fraud, Waste, and Abuse. And to learn how to safeguard your supply chain with greater simplicity, visit discover.sap.com/hana.

Follow me on Twitter: @howellsrichard.


About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.