Forecasting demand post COVID? 3 things management teams should do

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Forecasting demand post COVID? 3 things management teams should do

Being prepared for life post lockdown is where forecasting becomes paramount. A few connections have been asking me “How can you forecast COVID19?”. And there’s one simple answer:
“You can’t!”
Because forecasting assumes the future can be modelled on the past – this outbreak is unprecedented, so the underlying assumptions of forecasting are to some extent redundant. But, what do we need to do?

Being prepared for life post lockdown is where forecasting becomes paramount. Things might not go back exactly to the way they were before, but you can plan for a ‘nearer-to-normal’ scenario.
So, what should management teams be doing now?

First, model the impact of the panic-buy into the next few weeks and try to understand when buying patterns will go back to normality.

Second, understand the relationship of substitute goods (beers consumed at home vs beer consumed at the pub) as this will become paramount. Think about which demand trends are here to stay (more hand washing), and which will revert to pre-pandemic levels (toilet paper usage!). Whilst this is impossible to forecast using data at present, knowing these relationships will allow you to react quickly and keep demand satisfied at an optimised cost.

Third, “cleanse and revise” your history of this unusual event. If you don’t expect this to happen again! Remove it from any data that feeds your forecast. The best way to check it is to look at March 2021 – if you see an unexpected spike or trough from your statistical model; more work is required.

If you’d like any help, our Virtual Forecaster team are on hand. Please email us at forecasting@hatmill.co.uk

Being prepared for life post lockdown is where forecasting becomes paramount. Things might not go back exactly to the way they were before, but you can plan for a ‘nearer-to-normal’ scenario. So, what should management teams be doing now?

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