Effect of Bad Weather on FMGC Logistics

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Outline Introduction

Effect on transport

The current winter condition in the United Kingdom is the worst since 1963. One area that has been significantly affected is transport, which has almost ground to a halt. Several roads and motorways have been closed due to the snow. Hundreds of other roads, which have not been gritted, have been rendered impassable. Air travel has also been affected with several flights being canceled. This impact on transport is likely to be felt in a long time to come. (Histories of Windsor 2010)

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According to highway engineers, there were third more potholes on roads than usual with 322,731 extra potholes, which would cost between 20 million pounds to repair. (Brown 2010) Besides, there has been an increase in the number of accidents. This has been confirmed by the Automobile Association which has noted an increase in insurance claims to 500 up from the previous average of 200-300 per day.

Effect on labor

Disruption of transport has directly affected productivity as workers are unable to get to work. The Forum of Private Business has approximated a loss amounting to 230 million pounds per day as a result. The cold spell could cost more than 40000 lives this year apart from many others that would need medication. This also affects the workforce directly. Economists have warned that if 2 percent of workers continue to stay at home, then the country would lose about 1 billion pounds per day since the average GDP per day is about 5 billion pounds. (Acas n.d)

Effect on energy

There has also been a significant reduction in gas supplies in the country. Many companies have now stopped using gas in order to preserve supplies for future use. As temperatures reduce, demand for gas supplies increases. This problem can be compounded by the fact that Britain has just a storage capacity for 16 days compared to France, which has a storage capacity of 100 days, and Germany that has a capacity for 120 days. (Telegraph.co.uk 2010)

Vulnerability in the UK FMCG distribution network

The UK FMGC network is vulnerable to such adverse weather conditions. Its transport system is negatively affected. The effect of snow on roads leading to blockages of roads, an increase in accidents, and potholes disrupt the transport of goods to retailers. It is therefore either impossible to transport goods to customers or do the same at an extra cost and within a longer duration of time than the one that is anticipated. Besides, some goods are more perishable under snow conditions that increase the amount of moisture in the air. (Edwards 2010) This is further compounded by the fact that many people are keeping indoors with the retail chain itself affected severely meaning that people are not able to access goods easily and on time. (Mesure, Johnson, & Dugan2010)

Like any company, FMGC companies rely heavily on their workforce to carry out their activities effectively. Unfortunately, this workforce is affected adversely by such weather conditions as cold weather. First, a number of these employees may not be able to work because of unavailability of transport. (Road Transport in the Snow 2010) Others may stay indoors because of bad weather or they may require medication. Unavailability of personnel for work means that it is impossible or very difficult for these companies to carry out their normal duties with reduced personnel. Besides, it has generally been observed that people are normally less productive and tend to do their jobs less enthusiastically under such weather conditions. Reduced personnel productivity directly translates to reduced productivity for FMGC companies. Retail networks and other support networks that support FMGC companies have also been affected in the area of personnel among other areas. (Mesure, Johnson, & Dugan 2010)

When extreme weather conditions are prolonged, the effects are even more pronounced. We have seen that when people do not report to work, the country losses a lot of money since workers contribute to about 5 billion dollars of GDP per day. (McWilliams n.d)This will affect the economy reducing the purchasing power of people as the market shrinks leading to loss of profits for FMGC companies. (The forum of private Business 1999)

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Recommendations to minimize disruption to the logistical operations during bad weather

Transportation and storage

Ironically, adverse winter conditions come at a time when spending increases to levels that are not comparable with any other time in the UK and in the world in general. People have a tradition of spending and buying gifts during the Christmas season. FMGC companies therefore need to adapt and take advantage to increase supplies to customers even when the conditions are not favorable. One way of doing this would be to transport goods to the retail chain on time before adverse weather conditions set in. FMGC companies need to have warehouse stores at strategic locations where goods can easily be transported to any retail chain in the country within the shortest distance possible. While doing this, there is a need to recognize the fact that some areas are more spending than others are. This would require good planning to take goods to warehouses and retail chains in these locations in large amounts so that the goods are easily accessible to customers when required. London for example is one location where spending is very high. A strategy that I find useful in an effort of overcoming quick movement of goods easily is one where there are a series of warehouses to various destinations in the country. These warehouses should have quantities of goods in such a way that those close to the manufacturing facility have goods in the largest amounts followed by smaller warehouses. These warehouses should then be monitored in such a way that foods are quickly moved from the nearest warehouse to the next with a constant amount of goods maintained at each level. Besides, we should approach the manufacturers of our transportation fleet with a request to provide us with a more appropriate transportation fleet that can overcome and adapt to adverse weather (Applegate n.d)

Utilizing the retail Chain

Encouraging retail chains to acquire as many goods as possible just before adverse weather conditions set in is another important way of maintaining supply. (Vecchi & Brian 2007, p.5) FMGC would need to work closely with retail chains in order to negotiate discounts that come with early acquisition of goods, help them in developing and maintaining adequate storage capacities for goods among other measures that would encourage and enable retail chains to maintain enough quantities of goods for customers from our company. Storage methods need to borrow heavily from the most recent technologies so that perishable goods are preserved for the longest periods in case adverse weather is prolonged. This includes storage methods in our transport fleet as well as storage methods at warehouses. Moreover, utilizing the labor of the retail chain can come in handy during adverse weather conditions. These can help in transporting goods from their nearest warehouses to needed locations. Working together with the retail chain to train this workforce should also be considered. (Elhauge &Geradin 2007)

Communication and Automation of Storage facilities

Moreover, new technologies can be used in communicating and carrying out various functions in our supply network. Currently, the current trend where our customers in the retail chain order goods online in our B2B system has increased efficiency. I however have a proposal where we will need to automate a monitoring system for goods at our warehouse facilities. (Falk, Sockel, &Chen 2005, p.70)The same can be extended to storage facilities of our retailers. In this system, different types of goods are kept at specific locations where measuring sensors e.g. weight sensors measure quantities of goods of each type. This information is then communicated to our internet infrastructure which accesses various programs that will tell us what is where at what time and will also sound an alarm at locations where the minimum threshold of each type of good has been surpassed. We can then communicate to the nearest warehouse to rectify the problem as we then supply the needed goods from our manufacturing facility. (Peterson, Balasubramanian, & Bronnenberg 1997, p.330)

In addition, we also need to develop dynamic methods that would accurately predict spending behavior patterns in the country especially during the extremely cold but spending winter season. Our reaction would then be to manufacture and supply at least double of what our methods have predicted.

Workforce

We should work toward having a workforce that would reside or camp near storage facilities. This workforce can then be utilized to transport goods to areas where they are needed within the shortest time possible. This would also require us to have transportation vehicles at diverse locations in the country for use by the transporting workforce at these difficult times. It would also be necessary to take our workforce, especially the one dealing with transportation of our goods for more training so that they can be more prepared to deal with bad weather problems. Providing camps and housing for our workforce that protects them from adverse weather apart from providing a good medication scheme for them should also be considered. We also need to motivate our workforce maybe by offering better compensations or using any other method of motivating them at times like this to work in these difficult conditions apart from working with local authorities to grit critical roads needed for delivery of goods to customers on schedule.

Business opportunities arising from cold weather seasons

Extreme weather conditions can be a blessing in disguise as it offers several business opportunities that companies can take advantage of. There is obviously an opportunity in gas supplies. These have always dwindled during cold weather due to an increased demand. Mining, storage and transportation of gritting salt for roads, which has been in scarcity at this time is another business opportunity that exists. (The forum of private Business 1999) There are also opportunities in the supply of warming mechanisms, clothes for keeping warm among other things needed in cold weather. Moreover, there is an opportunity in the plumbing sector. So many pipes have been bursting during this cold season at such a rate that plumbers have not been able to keep pace with demand for their services. Manufacturers of house equipment should explore ways of developing devices such as warming devices that use small amounts of gas or probably those that use other sources of energy. These can be sold at a reduced cost to customers who are desperate to keep from clod. (Corstjens 1999)

Conclusion

Supplying goods on schedule in difficult conditions like bad weather conditions can be one of the most challenging tasks for FMGC companies. This calls for proper planning and assembling of proper arsenal in terms of an enduring and able workforce. It also calls for an efficient transporting fleet and storage facilities, and an able and resilient retail chain. There is also the need for a cooperative local and national government among other requirements.

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References

Acas. n.d., Transport and adverse weather, 2010, Web.

Applegate.n.d, Total warehouse solutions UK ltd, 2010, Web.

Brown, J. 2010, Pothole nation: Snow damage adds to £10bn bill to repair Britain’s crumbling roads, Web.

Corstjens, J.1999, “Retail competition in the fast-moving consumer goods industry: The case of France and the UK”, European Management Journal, Vol. 13, no. 4, pp. 363-373

Edwards, D.2010, Snow, Web.

Elhauge, E, &Geradin, D. 2007, Global Competition Law and Economics.

Falk, L.K. Sockel, H, &Chen, K. 2005, “E-Commerce and Consumer’s Expectations: What Makes a Website Work” Journal of Website Promotion, 1(1) (65-75)

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Histories of Windsor.2010, Historical Note – Other Thames Freezes, Web.

McWilliams, D.n.d., Don’t exaggerate economic impact of the freeze…much of the lost GDP will be made up in the coming weeks –but some cash strapped businesses might be pushed over the edge, Web.

Mesure, S, Johnson, A, Dugan, E.2010, The Big Freeze 2010: An audit, Web.

Peterson, R. A., Balasubramanian, S., & Bronnenberg, B. J. 1997, “Exploring the implications of the Internet for consumer marketing”. Journal of the Academy of Marketing Science, 25, 329–346

Road Transport in the Snow. 2010, Web. 

Telegraph.co.uk. 2010, British factories face gas rationing as supplies drop sharply and demand surges, Web.

The forum of private Business.1999, Employee absenteeism because of bad weather could cost 230 million, Web.

Vecchi, G. A.; Brian J. S. 2007, “Increased tropical Atlantic wind shear in model projections of global warming”, Geophysical Research. 

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