The TikTok Effect: Are companies’ supply chains resilient enough to go viral on TikTok?

Imagine, overnight, millions of people are clamouring for a particular product. It’s a dream come true for most businesses and a nightmare for companies’ supply chains – and you only have TikTok to blame. 

The social network’s increase in popularity has given rise to viral trends, as user-recorded videos spike in popularity dragging certain products along with them. In recent years, we’ve watched cranberry juice chugged to the soulful sounds of Fleetwood Mac, giving new life to our leftovers with a simple tortilla hack and roasted tomatoes and feta like the Finnish.  

It’s communal, delightful and entirely unpredictable – and it’s catching supply chains off guard. 

Reports of demand spikes and shortages followed each of these instances, and it’s not just affecting food and beverage supply chains. After slime-making became an Instagram fad in 2016, sales doubled for slimes. This year, many are predicting cleaning product surges and engagement spikes around housework hashtags. Brands don’t have to wait for empty shelves to take action, though.  

Thanks to demand planning innovations, supply chain planners are detecting potential demand spikes before they become global phenomena – even when that data comes from outside sources, like TikTok or Google Trends. These capabilities, combined with existing agile supply chain practices, can help businesses embrace the social media hordes if or when they arrive. 

Planning for a social media-driven demand spike 

One of the best ways to prepare for known unknowns, like going viral on social media, is to build a scenario-planning playbook. These guides have what-if scenarios and forecasting models for potential disruptions, so business planners won’t waste time making decisions when every second counts. 

These could include options for what to do when demand spikes, a plant goes offline or you are facing a raw materials shortage. They even take into consideration disruption severity or risk tolerance. These forecasts can then be incorporated into scenarios, so you are ready with your best outcomes, depending on which reality arrives, and can quickly adapt your plans accordingly. 

But a playbook alone is not enough. To be able to react in real time, supply chains need an integrated planning system with end-to-end synchronization that enables everyone in the network to instantly see and respond to the impact of a change while maintaining alignment with business objectives. The integration should be global and holistic, not just horizontal, so teams can identify and prioritize a viral trend in one region without negative impacts on customers in other areas. 

For example, Procter & Gamble relied on its integrated planning system and scenario planning capabilities to respond to regional disruptions during Hurricane Irma. Social media did not play a role, but as with any unanticipated event, having total visibility enabled P&G to prepare its supply chain across all at-risk areas, so it could meet customer needs without interruption.  

The need for businesses to predict potential spikes 

For businesses, it is important not to wait for your marketing team to alert you to social media trends. Businesses are transforming their supply chains to include demand-sensing capabilities that tap into real-time, external data sources to capture leading indicators, including weather forecasts, point-of-sale inputs, news alerts and social media trends. 

For example, an AI/ML platform can automate data collection and pre-processing, allowing planners to focus their attention on generating demand insights and forecasting. Using digital transformation to increase agility and empower planners is especially important when planning for circumstances that don’t exist in historical data, like a social media-driven trend. 

These capabilities not only help supply chains meet original demand but also create new opportunities. Some international companies like OceanSpray saw lifts in cran-raspberry sales when leaders sped up the introduction of new beverages and snacks to seize on a captive audience. 

Visit Kinaxis.com to find out how to transform your supply chain today!