Resilience Role of Distribution Centers amid COVID-19 Crisis in Tier-A Cities of India: A Green Field Analysis Experiment
-From Journal of Operations and Strategic Planning
The outbreak of COVID-19 has resulted to long-term severe global disruptions which immensely affects the viability (Ivanov, 2018b) of supply chain ecosystem (Ivanov, 2020). In recent times, these supply chain (SC) disruptions (Chesbrough, 2020; Choi, 2020; Currie et al., 2020; Ivanov, 2020a; Ivanov & Das, 2020; Ivanov & Dolgui, 2020b; Kinra et al., 2020; Madhavan & Kaushika 2020; Sarkis et al., 2020) have affected all the elements of economy and society (Ivanov, 2020) and raised a serious concern for a sustainable supply chain management (Islam et al., 2020).
Unlikely, 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. Therefore, in order to align various supply chain practices such as inventory management, purchase management, and strategic supplier relationship (Chong et al., 2011; Dubey & Ali, 2015; Langerak et al., 2004; Li et al., 2006; Truong et al., 2017) with the demands of surviving in a changing environment, viable system model by Beer (1985) and ecology modeling angles (Aubin, 1991) can be followed.
However, these SC practices vary from one manufacturing environment to another (Brun & Castelli, 2008; Trkman & McCormack, 2009), and an urgent need arises to focus on total quality management (TQM) and supply chain management (SCM) (Duarte et al., 2011; Narasimhan et al., 2005; Sharma & Modgil, 2019). This will act as an instigator to improve the financial performance of these manufacturing firms and SC viability in the current scenario (Ivanov, 2020).
In the current context of COVID-19 outbreak where supply chains are facing higher risk of disruptions, one relevant question that rises 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 Bhasin (2019).
Though COVID-19 pandemic has revealed a series of novel challenges for retail SC including insufficient logistics infrastructure and ‘dilution’ of transportation problem (Stošić Mihajlović & Trajković, 2017). Hence, in order to improvise the current situation, DC in combination of warehouses plays an important and significant role (Baker, 2008). 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. Therefore, to deal with the present circumstances, DCs need to be more responsive to volatile markets (Maltz & DeHoratius, 2004) and variances in the overall volume of goods (van Hoek, 2001) to meet the present SC’s agile requirements (Baker, 2008).
The current scenario also demands the same kind of approach from government food distribution agencies like 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 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, ‘Lifeline Udaan’ flights mission was also carried out, in lieu of this pandemic disease where private and government aircraft fleets transported the essential commodities to remote parts of our nation. During this mission, they distributed 863 tonnes of food to the primarily affected regions (Iyer, 2020). Even under the current COVID-19 scenario, the government-managed ‘Licensed Fair Price Shops Network’ ensures 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.
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