Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the planet. Economic indicators and health have been affected and all industries have been touched within one of the ways or perhaps another. Among the industries in which it was clearly apparent would be the farming and food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on 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 the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was apparent to many people that there was a big impact at the conclusion of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that will the effect is less clear. It’s therefore imperative that you find out how well the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food resources chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, found food service down It is evident and widely known that need in the foodservice stations went down on account of the closure of places, amongst others. In a few instances, sales for vendors in the food service business as a result fell to aproximatelly 20 % of the original volume. As an adverse reaction, demand in the retail stations went up and remained within a quality of aproximatelly 10-20 % higher than before the problems started.
Products which had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic material was needed for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ houses instead of in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a significant affect on production activities. In a few cases, this even meant a complete stop in production (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out on the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is limited during the very first weeks of the problems, and costs that are high for container transport as a result. Truck transport experienced different issues. To begin with, there were uncertainties about how transport would be managed for borders, which in the long run were not as stringent as feared. The thing that was problematic in most instances, nonetheless, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary components of supply chain resilience:
To us this particular framework for the analysis of the interviews, the findings indicate that few businesses were nicely prepared for the corona problems and in fact mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This looks particularly challenging for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capacity to do so.
Next, it was found that more interest was necessary on spreading threat and also aiming for risk reduction within the supply chain. For the future, this means more attention ought to be provided to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations where need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but additionally to boost market shares wherein competitors miss options. This particular challenge isn’t new, though it’s additionally been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic effect of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It’s often unclear how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain operates are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the traditional discussions between generation and logistics on the one hand as well as marketing on the other, the future must tell.
How is the Dutch meal supply chain coping throughout the corona crisis?