Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been touched inside a way or another. Among the industries in which this was clearly apparent is the agriculture as well as food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to a lot of individuals that there was a big impact at the end of the chain (e.g., hoarding in grocery stores, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for which the effect is less clear. It is therefore vital that you determine how effectively the food supply chain as a whole is actually prepared to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It is obvious and popular that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In some instances, sales for suppliers in the food service industry thus fell to about twenty % of the original volume. Being a complication, demand in the retail channels went up and remained within a quality of about 10-20 % greater than before the problems started.
Products that had to come through abroad had the own issues of theirs. With the shift in need from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup and plastic material was necessary for use in buyer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a significant effect on output activities. In a few instances, this even meant a full stop of production (e.g. inside the duck farming industry, which emerged to a standstill as a result of demand fall out on the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capability throughout the very first weeks of the problems, and high costs for container transport as a consequence. Truck travel encountered different problems. To begin with, there were uncertainties regarding how transport will be handled at borders, which in the end were not as stringent as feared. What was problematic in cases that are most , nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the key things of supply chain resilience:
To us this framework for the analysis of the interviews, the conclusions show that few businesses were nicely prepared for the corona crisis and actually mainly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for versatility and agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the potential to do so.
Second, it was discovered that much more interest was needed on spreading threat as well as aiming for risk reduction in the supply chain. For the future, this means more attention has to be provided to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations in which demand cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to improve market shares in which competitors miss options. This particular challenge is not new, but it has also been underexposed in this specific problems and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the economic impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how further expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the basic considerations between logistics and generation on the one hand as well as marketing and advertising on the other hand, the potential future will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?