Abstract
It is a challenging task to manage a perishable food supply chain (PFSC), due to the product’s short lifetime and to demand uncertainty. Even worse is the fact that, because of the multitude of participating stakeholders in production, distribution, and retailing, the PFSC becomes complex and thus particularly vulnerable to crises. Product shortages that result from an outbreak like COVID-19 often cause customers to seek alternative sources of supply, possibly with a larger purchasing amount (i.e., hoarding), leading to even severer demand uncertainty after the shortage period. To manage a sustainable and resilient PFSC after an outbreak, supply chain partners need to share and use the right information to facilitate decision making. A system dynamics simulation was thus applied to study a cheese supply chain with three tiers. Three scenarios that cause product shortages were simulated. Seven balanced feedback loops and two reinforced feedback loops were identified from the simulation model. Through the feedback loop dominance analysis, we identified four dominant loops that facilitate the generation of endogenous demand. In order to alleviate the negative influence of endogenous demand, it is suggested that the information sharing that causes endogenous demand be stopped and a loosely coupled strategy to support decision making utilized.
Highlights
It is a challenging task to manage a perishable food supply chain (PFSC), due to the product’s short lifetime and demand uncertainty
The underlying principle is that if process structure determines system behavior, and system behavior determines supply chain performance, the key to information sharing and decision making is acknowledging the relationship between processes and phenomenon and managing the dominant feedback loops
To evaluate the level of resilience for PFSC, we propose that lost sales should be the other performance measurement in our simulation
Summary
It is a challenging task to manage a perishable food supply chain (PFSC), due to the product’s short lifetime and demand uncertainty. The product shortage often further causes customers to seek alternative sources of supply [5], possibly with a larger purchasing amount (i.e., hoarding) [6], leading to even severer demand uncertainty after the shortage period. This is exactly what we have witnessed during and after the COVID-19 outbreak in China: during the outbreak, production and/or distribution capacity shrank and customers hoarded larger safety stocks; while after the outbreak, consumers’ overall confidence declined [7]. To better handle the situation after the outbreak, the access to reliable and timely information about looming risks and their consequences for consumer behavior is of high importance for the management of PFSC [8]
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
