Post pandemic strategic planning of food catering production and distribution networks: A regional case study

Abstract

Due to the Covid19 outbreak, the food catering industry faces disruption of demand traits and great uncertainty about the future development of market segmentation. The need for a re-design of production and logistic networks faces the lack of knowledge about cost drivers, rendering the application of mathematical optimization models challenging. In this paper, a cost components analysis is carried out to quantify each cost item's impact on the full meal cost. Cost analysis aims to formalize the relationship between meal cost and parameters such as productivity, meal conservation regime, customer typology, portioning method, and customer-plant distance. The cost parameters are adjusted through empirically driven correction factors to include operational and management complexities that would otherwise be neglected. The obtained parameters feed a total cost minimization model for a productive and distributive catering network. The location-allocation model chooses the production capacity to activate in each production plant for every meal-type and achieves the customer-production plant pairing. The framework is applied in an Italian regional case study to compare the BAU scenario to two different To-Be scenarios. The As-Is scenario considers four different production facilities serving the pre-pandemic demand of 2019, while the To-Be scenarios are based upon a demand forecast enforcing a more resilient network. The analysis shows how re-designing production and distribution networks enables meeting uncertain demand while keeping FMCs under control within a regional environment.