Wednesday, 2 April 2014

Is the Met Office new model of relevance to procurement

British scientists have developed a new forecasting model which is said to deliver 80% accuracy. While that may help in planning when to cut the grass and whether to get the BBQ going, is it relevant to procurement?

Anything which can help predict potential demand of goods and services should be of direct relevance to procurement as it cascades to availability and pricing.

Let's consider a few examples. Improved reliability of weather forecasting would:

  • Enable better estimating of the demand for road salt; 
  • Better profile the demand for flood defences;
  • Provide predictability of the demand for some vaccines;
  • Help schedule construction works;
  • Enable the negotiation of rates which could be gained from lower cost scheduling.
But perhaps we should start from a different position. Do you know which elements of your procurement portfolio are directly impacted by the weather, and do you take any steps to mitigate against the adverse risk of fluctuations while gaining the potential benefits? Perhaps someone else in your organisation's planning is considering weather risk - do you talk with them about the commercial implications.

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