Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. Economic indicators and health have been affected and all industries have been touched in one of the ways or even another. One of the industries in which this was clearly obvious would be the agriculture and food business.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was clear to many men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding doing grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for that the impact is much less clear. It’s thus vital that you determine how properly the food supply chain as being a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, found food service down It’s evident and popular that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service business thus fell to about twenty % of the initial volume. As a side effect, demand in the list channels went up and remained within a level of about 10-20 % higher than before the problems started.
Products that had to come via abroad had their own issues. With the change in need from foodservice to retail, the need for packaging changed considerably, More tin, glass or plastic was required for use in customer packaging. As more of this particular packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had an important effect on production activities. In certain instances, this even meant a full stop in production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity that is restricted during the earliest weeks of the problems, and high expenses for container transport as a consequence. Truck travel encountered various problems. Initially, there were uncertainties regarding how transport will be handled for borders, which in the long run weren’t as strict as feared. The thing that was problematic in instances that are most , however, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key elements of supply chain resilience:
To us this particular framework for the assessment of the interviews, the results show that not many businesses had been well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for agility as well as versatility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capability to do it.
Next, it was found that more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, meaning far more attention should be given to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in cases in which need can’t be met. Explicit prioritization is required to continue to meet market expectations but in addition to boost market shares wherein competitors miss opportunities. This task is not new, although it has also been underexposed in this specific problems and was often not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the economic effect of a crisis additionally relies on the way cooperation in the chain is set up. It is typically unclear exactly how extra expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally replace the traditional discussions between logistics and creation on the one hand and marketing and advertising on the other hand, the long term will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?