Cold beer or hot coffee? Procurement planning and demand forecasting at temporary events

This is the second blog from Daniel Ball of Wax Digital in the "avoiding the temporary tantrums" series,  looking at the challenges of purchasing around temporary sporting events and festivals. It focuses on the issue of forecasting. How do you ensure you buy what you need at the right quality, correct quantity and at the right price?

Surprises occur at most major events. To name a few recent sporting examples, Murray’s early exit from Wimbledon, a 13-year old winning a swimming medal in Glasgow, or the Spanish football team’s disastrous exit in Brazil (not to mention the host team’s humbling at the hands of Germany).

But when it comes to purchasing – as we all know too well – businesses and procurement people don’t like surprises. Effective procurement relies increasingly on spend and supplier data pulled from Purchase to Pay systems to forecast future demand, choice and price. This data is critical in ensuring that purchases meet the needs of the business but are not bought in surplus; it also ensures that effective category management and contract review can take place on a cyclical basis.

When it comes to temporary procurement for events however, there can be a number of forecasting challenges.

Firstly there could be a frenetic period of sourcing and buying, during which the focus is too much on ‘getting it done on time’ rather than making the right supplier selections. Using data from previous events would help the event organisers to do more procurement planning during their seasonal downtime.

Secondly there tends to be a lot of emotive purchasing. With event organisers often more focused on passion rather than the pounds in their pocket, purchasing forecasts may not even be seen as necessary. In reality, knowing what was purchased and used in previous years gives you sound data on which to negotiate with new suppliers, or discuss future discounts if your requirements are expanding.

There are also increasing pressures on events to be sustainable and environmentally conscious. The clean-up after these events can be huge. Inadequate forecasting at the outset could lead to a shortfall in waste management, which could damage the reputation of the event or lead to licences being revoked in the future. Even the weather can make a huge difference to the amount of certain items needed – more ice cream or more coffee for instance!

I spoke recently to Mick Game, who runs festivalsforall – an information and ticket site for festival goers in the UK. He sees lots of opportunity for improved procurement forecasting in the sector.

“For music festivals artists are clearly the biggest cost but rarely is procurement process applied to these bookings,” says Game. “It may seem like a difficult area to forecast, but actually knowing which artists drew the crowds and where, or linking ticket sale trends to line-up announcements could show you who you should be putting your money with.”

Beyond the hire of artists, the various purchases you need to run an event – security, waste management, catering and so on, are all forecastable. “Categories such as security tend to be on three to five year terms, so there should be careful reviews of supplier performance, and future requirements as events grow,” says Game. “Forecasts may show you that you are in a strong place to negotiate a better deal, or that you are under-resourcing your clear-up team which could burden you with financial penalties.”

So, temporary event organisers should seek to formalise processes around what may seem like qualitative or emotive purchases. They may be designed to make an event unique or quirky, but could also benefit from some data underpinning.

Forecasting is clearly more difficult without historical insight or a regular purchasing cycle to analyse, but most successful events are repeated and this provides an opportunity to procure accurately and cost effectively. Forecasting gives a sound basis for ensuring a good experience and keeping risks low – which we’ll explore further in future blogs. The motivations of event organisers can be vastly different, from headline event brands such as V, which have a clear commercial objective, to good old Glasto doing it for the kudos and experience. But in all cases, better procurement forecasting is possible and can deliver an improved outcome for organisers and visitors.

Editor's note: I thought this was a good day to publish Daniel's article as it is the first day of Reading and Leeds festivals. Read our review of Reading day one tomorrow! (Peter Smith)

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