Resilience of Distribution Centers amid the COVID-19 Crisis: The Challenge of Supply Chain Management
The outbreak of COVID-19 has resulted in long-term severe global disruptions which immensely affect the viability of the supply chain ecosystem. In recent times, these supply chain (SC) disruptions have affected all the elements of the economy and society and raised a serious concern for the sustainable supply chain management.
The virus has posed critical challenges during the lockdown period since March 25, 2020 in India, and the entire food supply chain has witnessed a big hit in terms of loss of revenue. To align various supply chain practices such as inventory management, purchase management, and strategic supplier relationship with the demands of surssed a big hit in terms of loss of revenue. To align various supply chain practices such as inventory maviving in a changing environment, a viable system model by and ecology modeling angles can be followed.
However, these SC practices vary from one manufacturing environment to another, and an urgent need arises to focus on total quality management (TQM) and supply chain management (SCM). This will act as an instigator to improve the financial performance of these manufacturing firms and SC viability in the current scenario.
In the current context of the COVID-19 outbreak where supply chains are facing a higher risk of disruptions, one relevant question that arises is: how can cost savings be created by reducing warehousing cost. Therefore, today’s supply chain leaders go for warehouses and distribution centers (DCs) to meet the dynamic demand of customers during this disruption.
Though the sustainable supply chain management during the COVID-19 pandemic has revealed a series of novel challenges for retail SC including insufficient logistics infrastructure and ‘dilution’ of transportation problem. Hence, to improvise the current situation, DC in a combination of warehouses plays an important and significant role. This combat will solve the problem of distribution and storage of staple food to various physical locations. Hence, warehouses store the staple food and DCs help in the rapid movement of staple food from one location to another. To deal with the present circumstances, DCs need to be more responsive to volatile markets and variances in the overall volume of goods to meet the present SC’s agile requirements.
The current scenario also demands the same kind of approach from government food distribution agencies like the Food Corporation of India (FCI), which collected all the staple food (grains, millets, sugar, oil, etc.) directly from farmers and was responsible for further food distribution in the supply chain. FCI was further relying on Indian Railways and road transport and supplied almost 8 million tons of food grain to different regions of the nation with the help of various distributors and local government bodies.
In addition to this, the ‘Lifeline Udaan’ flights mission was also carried out. This mission distributed 863 tonnes of food to the primarily affected regions. Even under the current COVID-19 scenario, the government-managed ‘Licensed Fair Price Shops Network’ ensures the availability of the available goods under the public distribution system (PDS), round the year. FCI supplied 0.193 million metric tonnes of grain in just 2 days during the lockdown period. Furthermore, these efforts became more fruitful and worthy with the help of NGOs, grocery stores, e-commerce players, and thousands of truck drivers.
This article has explored six potential regions for staple food distribution among tier-A cities of India. It revealed that DCs play a more active role than the warehousing segments. During this period of crisis, DCs turned out to be assets of long-term nature and therefore, a solution to the real challenge of operationalizing supply chain agility. Many companies have built and implemented strategies to deal with supply chain risk management and business continuity strategies. They have diversified distribution channels from a geographic perspective to reduce the supply-side risk from any region.
Article details:
Resilience Role of Distribution Centers amid COVID-19 Crisis in Tier-A Cities of India: A Green Field Analysis Experiment
Gurvinder Kaur, Sudhir Pasricha, Girish Kathuria
First Published December 15, 2020 Research Article
DOI: 10.1177/2516600X20970352
From Journal of Operations and Strategic Planning