With events such as floods, strikes in distribution centres, and the recent pandemic often resulting in empty supermarket shelves, a team of researchers has developed a new way to keep supply chains moving during a crisis while simultaneously reducing costs and carbon footprints.
The study, led by Dr Arijit De from The University of Manchester’s Alliance Manchester Business School, looked at how distribution networks can adapt when part of the system goes down. Most retail supply chains rely on a mix of highly reliable but expensive distribution centres, and cheaper, more vulnerable ones that are more likely to suffer disruption. When one of these vulnerable hubs fails, the impact can cascade through the network, causing shortages, emergency transport costs and spikes in carbon emissions.
To tackle this, Dr De’s team created a two-stage analytical model. First, they used game theory to understand when warehouses are likely to cooperate and share stock with one another during a disruption. Then, they built an optimisation model that works out how to move goods most efficiently across the network, not only saving money but also cutting fuel use and carbon emissions.
The model was then tested with real-world data from a UK retailer. The results showed that smarter “goods sharing” strategies – where reliable warehouses temporarily cover for disrupted ones – can significantly lower costs while keeping customer demand satisfied. When environmental factors such as fuel consumption and emissions are included, the savings are even greater.
“Events like Covid, floods or strikes show just how vulnerable supply chains are to disruption, said Dr De.
“Our model gives companies 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 also found that greener, optimised redistribution strategies could reduce fuel costs by up to 30% in disruption scenarios compared to traditional approaches. That means lower emissions, lower costs for retailers, and ultimately fewer shortages for shoppers.
“We often think resilience and sustainability are in conflict – that being greener costs more. Our work shows the opposite: by planning for disruption and sharing resources smartly, companies can save money and cut emissions at the same time,” concluded Dr De.
NAM Implications:
- Deep down, much depends on team spirit…
- …even amongst rivals.
- Old Japanese Saying: ‘Of course we compete, but only on certain things’.
