Shortage of Carbon Dioxide in UK

RUNNING HEAD: OPERATION AND SUPPLY MANAGEMENT
0
Operation and Supply
Management
Essay
System 0032
[Pick the date]
Shortage of carbon di oxide in UK

Operation and Supply Management
1
Carbon di oxide is mainly used in the drinks and food processing industries; it can be found in
soft drinks, cider or beer and also used in preserving items like salads and poultry items. The
shortage of gas in UK leads to manufactures and end users in trouble and reason behind this
problem is ineffective supply chain. The sources through which this gas is produced are limited
that are bio-ethanol plants, European filter plants, and two plants in UK out of five plants are
currently operating. The main cause that has been highlighted through analysis is problem in
supply chain, in UK out of five suppliers currently two are operating, whereas the medium or
source of getting CO2 in UK is only through these plants due to that many of the big firms felt
the impact (Mikhailova, 2018). The production and operation of the big firms affected due to
shortage of gas because these firms have one supplier to supply gas that lead to stoppage of
production or slowdown in their production process, because of that supply of some product in
the market is low and demand of the products are more than the supply (D'Eusanio, et al.,
2019).
There are too many factors behind the shortage in supply of CO2; Firstly many factories across
Europe shut down at the same time, secondly natural gas prices are higher that leads to limited
production in the UK, third factor is that the fall in prices of ammonia influenced fertilizer
producer to import it from other countries instead of producing it in home country, so that leads
to decrease in production of CO2 as this gas is by product from the fertilizers producers.
The shortage of CO2 impacted many of the firms in UK, mainly to the beverages and food
industry. The gas is used in preserving food, to make things frozen in transportation and to make
frizzy drinks. Further the end users that are customers are not getting the products on time and
due to that consumption of these products reduce in the peak time that is in summer (Busch &
Shrivastava, 2018). In the UK market there was shortage of chicken due to inadequate supply
of CO2 and due to that most of the KFC branches were closed. Most of the poultry plants are
facing problem of shortage of gas due to that 60 percent of poultry processing could be affected
in upcoming days in UK. Due to shortage, supply of the drinks in approximately 1000 pubs in
UK could be cut off within few days all these pubs are operated under Wetherspoons. Gas
shortage in Europe seen at the highest level due to warm weather and World cup, that time
demand of drinks and beers are more than normal days (Cambridge, 2018).

Operation and Supply Management
2
Companies like Coco-Cola paused there production process because of gas shortage and this
signifies that supply of drinks in the market is going to decline in few days. Prices of most of the
product has increased, Pepsi Max increase their prices by 8 percent. Short supply of gas
impacted many of the users including retailers and end users, even this impacted the production
of goods such as drinks, poultry items and frozen items (Hotten, 2018).To ensure regular and
uninterrupted supply of gas, and it is needed to build an effective supply chain management. The
methods and model of supply chain management are discussed below that will be helpful in
overcoming the problem of shortage of gas in the UK.
In considering the above case of shortage of CO2 in UK, this shortage impacted on the flow of
goods in the economy and in UK market. Consumers are facing trouble in order to get the drinks
and poultry products. Prices of some products increase due to higher demand and low supply of
the product in the market. KFC shut few outlets on temporary basis because chicken is not
supplied on the outlets as carbon di oxide is needed in order to frozen and preserve poultry items
(Hotten, 2018). Drinks in pubs are not supplied due to interruption in production and operation
chain of the companies. This interruption in supply chain due to raw material shortage affected
the company’s profit and sales.
Supply Chain for CO2 gas
Source: (Fredendall & Hill, 2016)
By products from
chemical processes
Power Generation
PlantsCO2 Produced
(Suppliers )
CO2 Produced
(Suppliers)
Transported
through ships,
pipelines
Network and HubsPurified and
Stored(transporta
tion and storage)
Purified and
Stored(transporta
tion and storage) Preserve foods
To make fizzy
drinks
Big firms(coco-
cola, Pepsi)Used in Industry
(Buyers)
Used in Industry
(Buyers)
Buy fizzy drinks
End users
Pay for products
Raise demandConsumers
Consumers