Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched within one of the ways or some other. Among the industries in which it was clearly visible would be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to numerous people that there was a big impact at the tail end of the chain (e.g., hoarding in food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for that will the impact is less clear. It is therefore vital that you find out how properly the food supply chain as a whole is armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It’s apparent and well known that demand in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers of the food service industry thus fell to about 20 % of the initial volume. As an adverse reaction, demand in the retail stations went up and remained at a level of aproximatelly 10 20 % higher than before the problems started.
Products which had to come through abroad had their very own problems. With the shift in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic material was needed for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ homes instead of in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a big impact on production activities. In some instances, this even meant the full stop in 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 big section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport electrical capacity which is limited during the very first weeks of the problems, and high expenses for container transport as a direct result. Truck transportation encountered various issues. Initially, there were uncertainties about how transport will be handled at borders, which in the end weren’t as rigid as feared. The thing that was problematic in instances which are most, nonetheless, was the availability of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the primary elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the results indicate that few businesses had been nicely prepared for the corona crisis and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This seems especially complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capability to do so.
Second, it was found that more interest was necessary on spreading danger and also aiming for risk reduction in the supply chain. For the future, this means more attention has to be provided to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing strategies in cases in which need cannot be met. Explicit prioritization is needed to continue to meet market expectations but additionally to increase market shares wherein competitors miss opportunities. This particular challenge is not new, but it has also been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary impact of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It is often unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional discussions between production and logistics on the one hand as well as advertising and marketing on the other hand, the future will have to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?