Supply Chain Planning: What Can Businesses Learn From the 2014 World Cup?
While you are probably unlikely to ever have to organize anything on the same scale as the 2014 FIFA World Cup, businesses can learn from the mistakes made by the gargantuan logistics and supply chain operations. By Sam Phipps | Supply Chain 247
With millions of viewers across the world, this year’s FIFA World Cup is undoubtedly one of the most important events on the sporting calendar.
While all eyes will be on Brazil as the tournament unfolds, have you ever considered how much planning is required in order to host a successful international sports event?
Take for instance last year’s Sochi Winter Olympics: broadcast across a staggering 464 different international channels, the event reached an audience of around 3 billion sports fans.
Given that nearly half of the world’s population tuned in, those responsible for organizing the tournament were under tremendous pressure to ensure that everything went smoothly.
However, despite spending an estimated $50 billion in the run up to the games, the Winter Olympics were plagued with issues throughout which caused major embarrassment for the organizers.
Over in Brazil, the world cup has also been subjected to a great amount of disruption as a number of planning issues have played havoc on preparations for the tournament.
As a result of extensive delays and sky-rocketing costs, entire projects have been scaled down or completely abandoned. For instance, the international media center located near the new Curitiba World Cup stadium will remain a steel skeleton as the organizers decided to halt construction in order to rein in costs. While the building work is expected to resume after the tournament, in the meantime, the international media will have to settle with the organizers “plan B”: temporary tents pitched on a nearby car park.
Poor planning has also led to the disruption of several projects intended to improve Brazil’s air and rail infrastructure. Given that several of the country’s airports are still reported to be in a chaotic state, many are questioning whether the country has the capacity to cater to the 600,000 people expected to attend the world cup.
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While those fortunate enough to hold tickets for the World Cup finals may find the transportation problematic, given that several of the stadiums are still not finished, fans may face further disappointment.
For instance, with the opening game between Brazil and Croatia today (kick-off 4 p.m. ET), it seems unlikely that the Sao Paulo stadium will operate at full capacity as the ground still requires considerable work as well as approval from regulators that the construction meets the required health and safety standards.
The Sao Paulo stadium is not FIFA’s only concern however, as the Machadão Stadium in Natal and the Estadio Beira-Rio stadium located in Porto Alegre are also still under construction just days before kick-off. With such high expectations and so many problems in the run up to the world cup, FIFA’s reputation has undoubtedly been shaken (view video above*).
While you are probably unlikely to ever have to organize anything on the same scale as the Olympic Games or the FIFA world cup, businesses can learn from the mistakes made by the world cup organizers, as inadequate planning can be just as damaging to a business’s reputation.
For example, in supply chain management, failure to anticipate and respond to changes in demand could mean your business falls short of customer expectations. Given that disappointed customers are likely to purchase from an alternative supplier, ineffective planning can leave your business lagging behind the competition. As a result, proactively planning supply chain operations is essential in order to maintain competitiveness.
Furthermore, a major side effect of poor supply chain planning is waste. The topic of waste has been hitting the headlines for months in Brazil as organizers continue to scrap and scale back world cup projects. As far as businesses are concerned, as mentioned previosly, not having enough inventory to satisfy customer demand is bad, but having too much on hand can be just as bad with large sums of money being tied up in stock that may eventually turn into waste.
We will have to wait and see how Brazil copes during this year’s World Cup. For businesses, taking a strategic approach to supply chain planning can massively improve the chances of success. With supply chains growing evermore complex, this is often easier said than done.
Considering this, what role does planning play in managing your supply chain and what are some of the biggest supply chain planning pitfalls you face?
*Note: We apologize for any offending expletives and inappropriate comparisons contained in the video to our members – The premise for this message is recognizing the world wide excitement for the World Cup and knowing, or rather exposing, information about FIFA, the organization that produces it. We hope this explains, with some humor, the current (deplorable) situation FIFA runs its monopolistic operations.