Strategic Supply Chain Planning for Food Hubs in Central Colombia: An Approach for Sustainable Food Supply and Distribution

Featured Application This work considers a real-life problem posed by public institutions of Colombia responsible for the design and implementation of food supply master plans. As such, the results presented in this paper will likely have a direct impact in public policies that consider both ends of a fresh food supply chain: Farmers in the countryside and end consumers at the major demand centers. This paper investigates the problem of sustainable rural supply and urban distribution of fresh food products in central Colombia. Paradoxically, while farmers in the countryside suffer from poverty due to the low profitability of the agricultural activity, inhabitants at urban centers pay high prices for fresh and nutritious foods. In this work, we propose a supply chain system and a business model based on food hubs located on existing (and often abandoned) public facilities in the central region of Colombia. There are many examples in which the hub strategy has facilitated trade and logistics in supply chains. However, few studies consider the particularities of the presented case. We study a business strategy through a mathematical model which considers both the sustainable and efficient operation of the food hubs and better trading conditions for farmers. We propose a variant of the competitive hub location problem adapted to this case study. We tested the model under different scenarios such as changes in the attractiveness parameters, operation costs, and profit margins. The results suggest that if hubs are able to attract farmers, the model can be both sustainable for the hub concessionaires and for the farmers.