Can You Use The Weather To Forecast Demand?

When General Eisenhower was asked why the D-Day landings were such a success he reportedly replied “because we had better meteorologists”.

With technology continuously increasing the overall accuracy of weather forecasting, a common question we are often asked here at Lokad is whether meteorological data can be leveraged to optimize a company’s purchasing decisions.

In this episode of LokadTV, we explore this concept in a little more detail and discuss whether this data can be utilised in any concrete method to improve forecasting accuracy. The weather impacts our lives in many ways: you’re more likely to buy a certain kind of car for example depending on the type of climate you live in.

When you stop and think about it, it’s all too easy to imagine how many products can be affected by the weather, such as ice creams, barbecue meats and winter coats to name but a few. In addition, from a technical perspective, weather data is now available on a daily and very accessible basis. It therefore seems highly logical that weather data could be of some considerable help.

However, we learn why, from a supply chain perspective, weather forecasts are often too short-term to be useful and why it is actually extremely difficult to leverage this data. We discuss how the inherently localised nature of weather can introduce complications and debate how much trust can really be placed in meteorological data.

To bring things to a close, we explore the various implications of climate change and try to understand whether today’s questions of global warming will have any impact upon seasonal forecasts.