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The trade journal Gas World had reported in early June 2018, that the shortage of food grade carbon dioxide gas was the worst supply situation which had hit the European carbon dioxide business in decades. (Hotten, 2018) Carbon dioxide is the substance which is used firstly for food, which manages the extension for shelf-life of fresh meat and salads. Secondly for beverages, it used to carbonate the liquid which creates the fizz. (Dirnhuber, 2018)
The issue of CO2 shortage in businesses
The moment of the CO2 shortage for England, in the same period it had been a successful point of England to reach the semi-finals of the World Cup 2018, which relates to the investigation of the media covering such a situation through sport. This led to further impacts as the input of CO2 is very much crucial for sectors such as the global media brands. This had been the point of investigation for the shortage.
The fertiliser and bioethanol plants had gone down for the reason of maintenance during the summer, which had occurred across Europe. Moreover, there had been reports by the trade paper gasworld that due to high gas prices and competing lower cost stocks of ammonia had led to producers prolonging the downtime of ammonia plants. Furthermore, this had resulted that by the third week of June, suppliers began to notify the customers across Europe that supplies would not be arriving. (Wright, 2018)
The example of Tesco, which restricted beer sales by owned booker. The situation led to a limit of beverages by capping the amount bought by customers, which were 10 cases of beer and 5 of cider or soft drinks. The situation had named as to be the one of the biggest shortages which were evidenced and had come after the disruption case of Heineken and Coca-Cola. (Hotten, 2018)
Just in Time (JIT)
From the understanding, it had been identified that CO2 supply has been avoided from being ordered before shortage. Just in Time (JIT) is an inventory technique which minimises the means of supplies and production by only arriving at points of when needed. The rationale behind the approach is to help the process of improvement and reduce the variability of the process. This would be a linear approach as based on requirements and placing this approach to an example of beer sales, there are necessities made only when ordered by customers.
The main importance is to appreciate the manufacturing process, as JIT is behind the thinking, planning, and performing of the overall process. A further interpretation would be, JIT is a disciplined method of production which therefore stresses the importance of being followed. Time is also a crucial factor of the JIT approach as the goal is to continuously eliminate waste within production methods. (Singh and Ahuja, 2012)
Dell is a prime example of receiving assembled products through JIT, as their approach is different in terms of suppliers. Dell purchase their suppliers to achieve their goal. The rationale of purchased suppliers is due to the avoidance of dealing with the inventory of products, which then creates a short lead time on components. As a result, the products are assembled by Dell in enough time and shipped to the customer. (Franco and Rubha, 2017)
Moreover, Lean production is as an important manufacturing method in comparison to Just in Time, which focuses on limitation and delivering customer expectations. A further elaboration on limitation would be, it is based on using less resources in comparison with mass production. Another emphasis added to the CO2 shortage would be the fact that with lean production, it takes into account waste created through over-burden and waste created through unevenness in workloads. (Onwughalu, Okeke and Henry-Chibor, 2017) Which can be learned through the mistakes made within the process of the CO2 shortage, as the production of many such as crumpets, beer etc. had been affected from the crisis 10 days from the situation, which elaborates on the lack of delivery.
Also, the potentiality of limitation had been affected through 3 out of 5 key UK producers to shutdown in operation. The shortages which have caused an inconvenience to the world cup football, which was a time of high demand from customers. In evaluation, this can be viewed as non-organised approach in its manufacturing. As an advantage, there were some form of rapid response as there were small number of pubs which had beverages which are brewed by Heineken, further Heineken stated their breweries were working to full ability to serve consumers as soon as available. (Butler, 2018)
Following on the tragedy of the supply method within UK sectors, a practical example which is in evident of goods skills would be Nike. When Nike had supply chain challenges in delivery time, product quality and workplace conditions i.e. a form affliction to their lean process, over the late 1990s Nike had began a search for management interventions. Due to the Toyota Production System being selected for emulation, a Toyota consultant was hired which was required to norm with the lean concept to footwear manufacturing. A brief timeline of Nike’s implementation had caused a positive affect for the manufacturing process, and the running of its operation. Firstly, in 2002 Nike had secured commitments from long-term footwear suppliers which follow the lean running and production system created, and further on in 2004 they had established a dedicated training centre which was used to train both the factory managers and Nike staff. Which was a procedure of expectancy in clear understanding of the lean management. In elaboration, Nike had created such a strategy which simply follows the two-way method of limitation in time, materials etc. and delivering for the customers in demand. As a positive note, by May 2011 80% of Nike’s footwear supplier had committed to implementing the lean system. (Distelhorst, Hainmueller and Locke, 2017)
The Supply Chain Procedure
As the crisis of the CO2 shortage has been discussed in specific parts and examples have been given for two popular manufacturing methods, the supply chain process which is in evidence from the different sectors e.g. retailers are from specific elements of reaction.
The Demand Management is put into practice for the different sectors which acquire the CO2 for products. The approach is a combination of customers’ requirements with the firm’s supply capabilities. The process which is also fixated with creating and implementing contingency plans when interruption is caused within the operations. (Croxton et al., 2001) The retailer owned by Tesco which is supported by bars, restaurants etc. had said during the shortage that the aim was to maintain the availability and satisfy the vast of booker customers. Furthermore, A spokeswoman for the British Retail Consortium had mentioned the severity of the CO2 shortage had led retailers and suppliers working intensively to safeguard the maintenance of food availability. (the Guardian, 2018)
Overall, the CO2 shortage crisis had widely affected many sectors of business although there are highlights of which show the adverse effect had been taken seriously, and implications of strategies have been put forth to stay on track and serve consumers on near demand level.
The situation is purely based on communication and how customers are the clientele for every sector. This leads on to the recommended approach to be able avoid such a situation. The Customer Service Management is a clear process as it is the firm which faces its customers. The process involves providing single source information to the customer which is acquired to be accustomed, which includes information such as product availability, shipping dates and order status. There is also the acquirement of providing information in real-time which involves the manufacturing and logistics. The PSA (Product & Service Agreement) is the key aspect within the process, as the workforce within a firm would identify the deliverables of the customer service process, operationalise the drivers for creating action and lastly outlines the staffing needs. As the first sub-process has been mentioned, this leads to the second sub-process which is an important factor of practice. The first sub-process involves standardised responses to standardised events with the deliverables, which then the second-sub process involves the workforce to create response procedures for each type of event. Furthermore, it includes the development of internal and external management for response.
As displayed, there is an effective monitory involved within the procedure of Customer Service Management and involves better contingency for justification. As there is procurement of good practice of planning and tracking involved which in depth insight, the third sub-process consists of the infrastructure for applying response procedures. (Croxton et al., 2001) Overall, the learning development of supply chain management does not end although with applying the right procedure will decrease the mistakes made within business and less time is wasted. A supply chain is the linked network of resources, activities, technology etc. and if one aspect is affected then the whole process receives the impact. Alongside, the supply chain management importance is based on the purpose which is improvement of trust and association midst supply chain partners. This therefore states that there is no such situation of a single connection with the business and the customer, as there is a foundation which should be created with the importance of effectuation. (Kleab, 2017)
- Butler, S. (2018). Pubs and retailers hope for end to CO2 shortage next week. [online] the Guardian. Available from: https://www.theguardian.com/business/2018/jun/29/pubs-and-retailers-hope-for-end-to-co2-shortage-next-week [Accessed 14 Jul. 2019].
- Croxton, K., Garcia-Dastugue, S., Lambert, D. and Rogers, D. (2001). The Supply Chain Management Processes. [PDF] Semantic Scholar. Available from: https://pdfs.semanticscholar.org/0917/d1ab106c5c028b65509881f8c1d5e76ff420.pdf [Accessed 14 Jul. 2019].
- Dirnhuber, J. (2018). What is CO2 used for and which food and drinks are affected by the carbon dioxide shortage in the UK? [online] The Sun. Available from: https://www.thesun.co.uk/news/6659043/carbon-dioxide-shortage-what-use-items/ [Accessed 13 Jul. 2019].
- Distelhorst, G., Hainmueller, J. and Locke, R. (2017). Does Lean Improve Labor Standards? Management and Social Performance in the Nike Supply Chain. [PDF] Institute for Operations Research and the Management Sciences (INFORMS). Available from: https://www.researchgate.net/publication/299432418_Does_Lean_Improve_Labor_Standards_Management_and_Social_Performance_in_the_Nike_Supply_Chain [Accessed 14 Jul. 2019].
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- Onwughalu, O., Okeke, K. and Henry-Chibor, E. (2017). Lean production and its effect in organizations: A study of selected manufacturing firms in Nigeria. [PDF] Scholarly Journal of Science Research and Essay. Available from: https://www.researchgate.net/publication/321085308_Lean_production_and_its_effect_in_organizations_A_study_of_selected_manufacturing_firms_in_Nigeria [Accessed 14 Jul. 2019].
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- the Guardian. (2018). JD Wetherspoon stops serving John Smith’s due to CO2 shortage. [online] Available from: https://www.theguardian.com/business/2018/jun/27/jd-wetherspoon-john-smiths-strongbow-co2-shortage [Accessed 14 Jul. 2019].
- Wright, I. (2018). Falling flat: lessons from the 2018 UK CO2 shortage. [PDF] Food & Drink Federation. Available from: https://www.fdf.org.uk/publicgeneral/falling-flat-lessons-from-the-2018-UK-CO2-shortage.pdf [Accessed 13 Jul. 2019].
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