Importance of Weather Insights in Supply Chain Management

According to a report* by UCL Hazard Research Center, there were 16 weather-related events in 2017 in the United States alone that cost one billion dollars each. As your company has most likely experienced, the weather is a huge influencer in a supply chain’s strategy, performance, and bottom line.

Whether it is typical bad weather, natural disaster, or uneventful “normal” weather, the impact can be both positive and negative. Day-to-day climate change has affected companies of all industries through energy and transport efficiency, crop growth rate, a surge in customer demand, and much more. Either way, a supply chain company needs to plan ahead and make informed decisions based on sophisticated weather insights that are consistent and accurate.

The Met Office, a national weather service in the United Kingdom, conducted research** in 2015 to understand how the weather impacts supply chain companies. According to the study, 47 percent of the surveyed supply chain professionals cited weather as “one of the top three factors external to their business that drives consumer demand.” Despite the high percentage, only 16 percent of them used commercial weather data.

Here are some potential benefits that come with integrating weather data into supply chain strategy:

  • Reduced annual operating costs
  • Annual revenue growth
  • Reduced annual legal, insurance, and risk mitigation costs
  • Improved performance levels
  • Improved on-shelf availability
  • Improved strategic planning
  • Improved sales forecasts
  • Improved worker safety
  • Automation for operational processes
  • Creating competitive advantage

It is important to have a clear understanding of what impacts weather has across the supply chain and build a clear strategy and a long-term plan for it. You can discover what aspects or projects can deliver high value and are able to be integrated with weather data.

Begin with asking these questions for your company:

  • How is your company capitalizing on weather insights for company growth while reducing costs and increasing revenue?
  • In what ways can your company benefit from better weather insights?
  • To what extent is weather data guiding your company’s decision-making?
  • What needs to be done to gain better weather-related insights?

With the information gathered from weather stations, real-time news, and historical weather data; forecasting models and machine-learning algorithms provide location-specific data about impacts of weather events.  This creates opportunities for supply chain companies to make decisions informed by weather insights.

If your supply chain has been struggling with unexpected weathers, no longer blame the weather. Instead, capitalize on it to your advantage!