Supply chain – The COVID-19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been affected and all industries are touched within a way or even yet another. One of the industries in which it was clearly apparent will be the agriculture and food business.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to most individuals that there was a great impact at the conclusion of this chain (e.g., hoarding in food markets, eateries closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the source chain for which the impact is less clear. It’s therefore important to determine how effectively the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, found food service down It’s apparent and popular that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In some cases, sales for suppliers of the food service business therefore fell to aproximatelly 20 % of the initial volume. As a side effect, demand in the retail stations went up and remained within a degree of aproximatelly 10 20 % greater than before the problems began.
Goods that had to come from abroad had their very own problems. With the shift in need from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was needed for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important affect on production activities. In certain cases, this even meant a total stop in production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capacity throughout the earliest weeks of the crisis, and expenses that are high for container transport as a result. Truck transportation encountered different problems. At first, there were uncertainties on how transport would be managed for borders, which in the end weren’t as rigid as feared. The thing that was problematic in cases that are most , nevertheless, was the accessibility of motorists.
The reaction to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary components of supply chain resilience:
Using this framework for the evaluation of the interview, the results show that few companies were nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do so.
Second, it was observed that much more interest was needed on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning more attention has to be made available to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases in which need cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to improve market shares where competitors miss opportunities. This challenge is not new, although it has in addition been underexposed in this specific problems and was usually not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the economic result of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is usually unclear exactly how additional costs (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain works are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally change the basic discussions between production and logistics on the one hand as well as advertising on the other hand, the potential future will need to tell.
How’s the Dutch meal supply chain coping during the corona crisis?