Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been completely touched within one of the ways or some other. Among the industries in which it was clearly obvious will be the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to a lot of people that there was a great impact at the tail end of this chain (e.g., hoarding around supermarkets, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for which the impact is less clear. It’s therefore imperative that you find out how effectively the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Demand in retail up, in food service down It is apparent and widely known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In a few instances, sales for vendors in the food service business thus fell to about twenty % of the original volume. Being a complication, demand in the list stations went up and remained within a quality of aproximatelly 10-20 % higher than before the crisis began.
Products which had to come via abroad had their very own issues. With the change in need from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was necessary for use in consumer packaging. As more of this packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a big impact on output activities. In some instances, this even meant the full stop in production (e.g. within the duck farming business, which arrived to a standstill due to demand fall-out in the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in restricted transport capacity throughout the very first weeks of the crisis, and expenses which are high for container transport as a result. Truck transport faced various issues. Initially, there were uncertainties about how transport would be managed for borders, which in the end weren’t as rigid as feared. The thing that was problematic in situations which are a large number of, nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the main things of supply chain resilience:
Using this particular framework for the assessment of the interview, the findings indicate that not many organizations had been nicely prepared for the corona problems and in fact mainly applied responsive practices. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This appears especially complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capacity to do it.
Next, it was observed that much more attention was necessary on spreading danger and aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be provided to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in situations where demand cannot be met. Explicit prioritization is actually required to continue to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This particular task is not new, although it has also been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona crisis shows you us that the financial result of a crisis additionally depends on the manner in which cooperation in the chain is set up. It is typically unclear exactly how additional costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic considerations between logistics and production on the one hand and advertising on the other, the long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?