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The Food & Drink Supply Chain Conference 29 June 2016

Introducing the Met Office

Protection, prosperity and wellbeing

Public weather service including National Severe Weather Warning Service

Met Office Hadley Centre for climate science and services

One of only two World Area Forecasters

Space weather forecasts

Services to government and industry in the UK and globally

Protection of lives and infrastructure in the UK and around the world

Supporting industry

Aviation

Road and rail

Renewable energy

Retail

Offshore oil & gas

Defence

Energy

Water

A broad range of customers

Forecasting the weather

OBSERVATIONS

HUMAN FORECASTER

CUSTOMERS

NUMERICAL FORECASTS

- 24 hours a day, 365 days a year

- Over 4 million outputs per day

- 3000 forecast products per day

Cray XC40 super computer

-16,000 trillion calculations per second

- One of the most powerful in the world

www.metoffice.gov.uk/retail

© Crown copyright Met Office 2014

DemandMet™

...Just in case you were wondering

Summary Location Forecasting

Summary Area forecasting

Areas and regions can be defined by

postcode sectors

Allows us to create area weather

summaries

Weighted by population density

www.metoffice.gov.uk/retail

© Crown copyright Met Office 2014

DemandMet™

Forecast Uncertainty

Climatology

(Later)

Analysis

(Now)

Initial Uncertainty

Best Estimate

Ensemble Forecasting

Weather impact on the supply chain

Challenges need to be managed in the

face of increasing weather extremes

including flooding, droughts and

extreme temperatures.

Sourcing

Poor weather disrupting transportations

can lead to temporary shortages.

Issues can be anticipated and

alternatives planned thanks to

increasing global supply chains.

Logistics

Temperature can drive massive uplifts in

sales.

59% of weather data users include

weather in short term sales forecasts.

Consumer demand

www.metoffice.gov.uk/retail

© Crown copyright Met Office 2014

DemandMet™

Weather

impact on

retail

Key weather factors

What weather factors are used in retail planning?

Maximum temperature

Sunshine hours

Feels-like temperature (winter)

Extreme bad weather events

“It’s mostly

temperature that

affects what people

buy.”

“When it snows,

people don’t want to

drive so we get an

uplift relative to other

retailers.”

“Stormy weather

affects shipping as

well as our own ability

to deliver. Adverse sea

weather can add 5-6

days to a shipment.”

Maximising sales

Case study: Top 4 supermarket chain

Hot weekends can result in 30-40% increase in sales

First hot weekend of 2013 forecasted ahead of media reports

200,000 bags of charcoal ready to supply stores

600% increase in sales, year-on-year

“Our best ever

week of BBQ

seasonal sales!”

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Reducing risks and food wastage

Case study: St. Jude’s storm, 28 October 2013

Customers notified of storm one week in advance

High winds including gusts exceeding 70mph in southern England

90% of trains didn’t arrive in London

Decreased footfall in London stores

Lunch food stocks in London reduced in

anticipation, minimising food wastage

Truck efficiency and safety

Case study: Walkers – 19 January 2015

High vehicles with light cargo at risk during strong winds and wind gusts

Walkers defined 50mph threshold for replacing high trucks – hourly forecasts

Strong winds with gusts above 80mph forecast in Midlands

Forecasts provided for key junctions

Walkers suspended truck movement

7 trucks from other companies had accidents that day

Applying weather forecasts

Weather forecasts support a wide range

of supply chain decisions

Respondents in our recent research

indicated that these would commonly

include:

Short term sales forecasts – 59%

Planning stock availability – 33%

Operational forecasting – 23%

Forecasts are also used in financial

analysis

Marketing decisions are also supported

Research responses included:

Promotional planning – 36%

Forecasting in-store footfall, in-store

merchandising and national campaigns – 9%

The benefits

81% felt forecasts allowed for

better on-shelf availability

69% felt forecasts

improved their customer

service

57% felt forecasts reduced waste

43% felt forecasts improved their

customer service

39% felt forecasts reduced

waste

62% felt forecasts improved sales

forecast accuracy 56% felt forecasts

improved sales forecast

accuracy

Retailers Suppliers

Thank you