How to predict supply and demand? Track the virus
Tracking COVID-19 across the globe can help increase preparedness in many sectors, including in supply chains.
Case in point: Long before the phrase “social distancing" would become part of our everyday vocabulary, before COVID-19 would be declared a pandemic and go on to paralyze the world, a Canadian-based artificial intelligence company, BlueDot, alerted people about the unusually devastating flu-like cases coming out of Hubei Province in China. By tracking a number of related variables including airline bookings out of China, BlueDot could even predict where the virus would spread next. Unfortunately, the warnings were largely ignored for three months.
Intelligence about the movement of the virus is useful for public health officials as it serves as a warning about where and how the novel coronavirus will likely land and peak. Counties can prepare hospitals in advance and gear up for an anticipated increase in patients seeking medical intervention.
The same kind of intelligence, says Neil Saunders, managing director at GlobalData Retail, is valuable for another reason: to track demand and supply so supply chains can bolster themselves accordingly.
Virus infects consumer demand
While retailers are understandably worried about supply chain issues on the manufacturing side, it is also important to pay attention to consumer demand. “The biggest problem for retailers right now is that customers aren't buying [discretionary] items,” Saunders says, “Retailers are saying they can't sell stuff because their doors aren't open. It is why Gap has now cancelled its orders two seasons ahead,” he adds.
Even once stores do open gradually, companies need to track demand, experts say. Global consulting firm McKinsey advised retailers to work on supply chain issues by keeping an eye on demand. “A crisis may increase or decrease demand for particular products, making the estimation of realistic final-customer demand harder and more important,” the report said.
3 ways to forecast a rise in consumer demand
Accurately predicting consumer demand is one of the key ways of ensuring supply chain resilience. And tracking the virus around the globe might give retailers the crucial intelligence they need to make it through the pandemic — and beyond.
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