Supermarkets in the UK have faced significant challenges in maintaining stock levels during crises, such as the panic buying seen during the COVID-19 pandemic, severe weather disruptions, and industrial action affecting distribution centres. To address these vulnerabilities, a team of researchers led by Dr Arijit De from The University of Manchester’s Alliance Manchester Business School has introduced a new model designed to enhance supply chain resilience while also promoting environmental sustainability.
The research focuses on the adaptability of distribution networks when faced with disruptions. Retail supply chains typically operate using a combination of reliable yet costly distribution centres and less reliable, cheaper alternatives. When a vulnerable hub fails, it can trigger a cascade of issues throughout the network, leading to product shortages, increased transport costs, and elevated carbon emissions.
To combat these challenges, the research team developed a two-stage analytical model. Initially, they applied principles of game theory to determine when warehouses might collaborate and share stock during a disruption. Following this, they formulated an optimisation model to identify the most efficient methods for transporting goods across the network. This approach not only reduces operational costs but also lowers fuel consumption and carbon emissions.
The model was validated using real-world data from a UK retailer. Results indicated that implementing effective “goods sharing” strategies—whereby reliable warehouses temporarily support those affected by disruption—can substantially decrease costs while meeting consumer demand. Incorporating environmental considerations, such as fuel usage and emissions, further amplifies these savings.
Dr De remarked, “Events like COVID, floods, or strikes show just how vulnerable supply chains are to disruption. Our model provides companies with a practical way to plan ahead, ensuring business continuity during crises while reducing their environmental impact. It’s about designing supply chains that are both resilient and sustainable.”
The research revealed that adopting environmentally friendly redistribution strategies could lead to a reduction in fuel costs of up to 30% during disruption scenarios, compared to conventional methodologies. This translates into lower emissions, reduced expenses for retailers, and ultimately fewer stock shortages for consumers.
This study offers valuable insights for UK supermarkets and other retailers navigating uncertain conditions. With climate change anticipated to increase the frequency of extreme weather events, along with ongoing pressures on global supply chains, developing adaptable networks will be essential for future resilience.
The findings are detailed in the paper titled “Proactive Logistics-Redistribution Strategic Planning in Response to Facility Disruptions under Contingencies,” co-authored by researchers from the Indian Institute of Management, National Taiwan University, and the University of Liverpool, published in the European Journal of Operational Research.
