Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. Economic indicators and health have been compromised and all industries have been completely touched within one way or perhaps another. One of the industries in which this was clearly apparent is the agriculture and food business.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to most individuals that there was a great effect at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for that the impact is less clear. It’s therefore important to determine how effectively the food supply chain as a whole is actually armed to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need within retail up, contained food service down It is obvious and widely known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for vendors in the food service industry thus fell to about twenty % of the first volume. As an adverse reaction, demand in the list channels went up and remained within a quality of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come via abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass or plastic material was required for wearing in customer packaging. As much more of this packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant affect on production activities. In certain cases, this even meant the full stop in output (e.g. inside the duck farming business, which came to a standstill due to demand fall out inside the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capacity during the very first weeks of the crisis, and costs which are high for container transport as a result. Truck transport encountered different issues. Initially, there were uncertainties about how transport will be managed at borders, which in the end weren’t as rigid as feared. That which was problematic in cases which are many, nevertheless, was the availability of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the results indicate that few businesses had been nicely prepared for the corona crisis and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for flexibility and agility. This seems particularly complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the potential to accomplish that.
Next, it was discovered that more attention was required on spreading danger and also aiming for risk reduction inside the supply chain. For the future, what this means is far more attention ought to be given to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but also to increase market shares where competitors miss opportunities. This particular task isn’t new, but it’s in addition been underexposed in this specific problems and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows us that the economic result of a crisis also is determined by the way cooperation in the chain is actually set up. It’s usually unclear precisely how extra costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain functions are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic discussions between logistics and production on the one hand as well as marketing and advertising on the other hand, the long term will have to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?