The following posting comes from Supply Chain Matters guest blogger, Guy Courtin.
On July 11th, 4:00 local time, the greatest global sporting event will kick off in Soccer City, South Africa – the Football (soccer) World Cup. I am sure some will argue that the Olympics are bigger sporting events, but the World Cup, to me, has surpassed the other global sporting event. How many sporting events have witnessed a civil war put on hold in order to watch the event? However, will the following month of football craziness mean more than just watching fans live and die by the success of their national teams? The World Cup will force us to think about how these global sporting events impact our businesses and supply chains.
Any business will need to be prepared for the drop in productivity as games are played every day – starting in the morning going through the afternoon for Western Europe and the Americas. In addition, does your supply chain lean upon football crazy countries? Brazil from the BRIC nations comes to mind. Or does your supply chain lean on nations such as South Korea and Japan, both nations are in the tournament – and the games, broadcast late in the evening or very early in the morning in Asia, might not make for a fresh work force in the morning! In the United States, there is always discussion every March about the drop in productivity during the NCAA men’s basketball tournament. Will the World Cup multiply that impact by 10, if not more? You might not have the most rapid response from your supplier if their nation is in middle of a World Cup match!
However what else must we think about during these major events? As a consumer product company, especially in the electronics business, you must be prepared for and aware of the potential uptick in demand that such an event can create. During the last World Cup, in Germany, there was a surge in the purchase of high definition televisions sets as the tournament was the first time the event was broadcast in HD. This marks the first major change in the broadcasting of the event since the 1970 World Cup, which was the first World Cup broadcast in color. Television manufacturers and broadcasters have also tried to time the release of 3-Dimensional technology with the World Cup. Unfortunately this has not caught on as the HD move did 4 years ago. Add to this the continued global economic malaise, and one should not be surprised that even this global sporting event cannot tempt enough consumers to make such a large purchase. The electronics manufacturers could get caught in misreading the potential demand signals from such an event. For their sake, let us hope they remembered that the economy remains poor regardless of the irrational exuberance that comes as the World Cup approaches.
For the next month, do not be surprised if your response time from your supply chain does not show a little sluggishness, and hopefully, your supply chain has not misread a false demand signal emerging from a global sporting event that can bring so much joy and so much heart ache to both fans and businesses.
If you are interested in my predictions for who will win the World Cup feel free to read my predictions.
Guy Courtin
