The demand supply chain has been rattled rather brutally thanks to Coronavirus. Businesses are on the road to recovery amid Covid-19 waves hitting every now and then. As lockdown-related restrictions begin to ease in certain cities, the big question remains its impact on demand and the preparedness of businesses, in the likelihood of more Covid-19 waves, future lockdowns etc.
We looked at the rising relevance of external data last week. Industries such as CPG (Consumer Packaged Goods), hospitality, et al who have been relying on past data to predict future sales, suddenly face the shocking invalidness of the existing data in the altered reality aka Coronavirus. Change is the only constant and hence new methodology must be used to predict demand. External data, the ‘change’, then brings in real time data for businesses to know the current consumption patterns of their customers. Once the Covid curbs ease up again, external data will help those relying on past data such as CPGs or the hospitality sector to measure its impact on the demand in the future. It will also come in handy in case of future lockdowns as the pandemic takes new turns.
A fine example of the altered circumstances would be the meat processing businesses. As restaurants shut for dining-in, their demand for goods from the meat processing industry dipped too. But what rose in stark contrast, was the demand for these goods from the home cooks. The learning for the industry here was to package meat in a different manner for this segment, i.e. smaller packs as against bulk packaging for the restaurant industry. They should, however, also be able to know when to begin packing in bulk once again, and that is where external data will play a big role.
The role of foot traffic: Previous footfalls were being used to deliver personalized ads to the smart phones of users. The same will now be used to know the whereabouts of people. To add to the above example, foot traffic can actually tell the meat industry that people have started stepping out more now and this would be their cue to start bulk packing again. Other data sources which are emerging include the data from OTT streaming platforms.
The new way in which demand is predicted is not a cakewalk, but a solid mix of data science and progressive analytics with clever employment of algorithms to arrive at the desired results. Risk management needs to be looked at in a whole new light. The use of advanced analytics in any future data prediction will form the basis of business planning. The competition will be edgy too and those who employ data in a more aligned way and execute the new tech faster will definitely score big.
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