After Hurricane Harvey’s path of devastation through parts of Texas and Louisiana, and with successor storm Irma bearing down on the South Florida coast at press time, it’s more important than ever that food retailers be properly prepared for the kinds of severe weather events that now have become almost commonplace. Since grocers serve as valuable resources to affected areas, providing food, water and other necessary supplies both before and after a weather-related disaster, remaining up and running to the extent possible, by minimizing any shortages and outages their businesses may incur as a result of such storms, is a key priority.
“As grocers prepare for the arrival of Hurricane Irma and help people to recover in the wake of Hurricane Harvey, it reinforces the importance of accounting for the unpredictable nature of weather in planning, as even the best fresh supply chains can be thrown into disarray by exceptional weather fluctuations and its impact on consumer behavior,” noted Andrew Blatherwick, chairman of RELEX Solutions, a Helsinki, Finland-based retail-planning company with U.S. headquarters in Atlanta.
Continued Blatherwick: “Most grocers are good at taking seasonality into account; however, it’s far more difficult to account for short-term and real-time weather fluctuations, and this is particularly true with short shelf-life products such as produce, which are the most vulnerable to the impact of weather.”
He recommended that grocers consider doing the following, “so they can better react to today’s disasters and prepare for those sure to come”:
- Identify weather-related items: “Identify all grocery items that are susceptible to changing weather patterns and map the extent of their susceptibility and interdependency using historical data,” he advised. “Once these items have been identified, grocery executives can measure change in demand between normal weather patterns and exceptional weather. Storms can have the biggest impact on the grocery industry, and there is a massive increase in demand as consumers prepare for and in the wake of extreme weather.
- Incorporate weather modeling in supply chain forecasting: “Grocers should use short-term or real-time weather forecasts to identify the demand fluctuation when weather changes strike, and make sure the right levels of safety stock are in place at warehouse and stores,” he suggested. “In the same way, grocers should look to increase shelf display of the items most affected, such as bread and water, while reducing others, helping ensure enough inventory to cope with the exceptional demand.”
- Prepare by running what-if scenarios: “By simulating upcoming deliveries, orders, stock levels and spoilage throughout the supply chain, a grocer can visualize how the supply chain would behave if exceptional weather hits and the original sales forecast is no longer valid,” explained Blatherwick. “This enables grocery executives to directly see what their options are to respond and to quickly make informed risk-based business decisions.”
By adopting such measures, food retailers can ride out a severe storm with greater confidence, according to Blatherwick: “With increasing sophistication and accuracy, grocers can guarantee that when unexpected weather does hit, shelves are optimally stocked at the individual store and product levels.”