Supply chain – The COVID 19 pandemic has definitely had its impact influence on the planet. Economic indicators and health have been compromised and all industries have been touched inside a way or yet another. Among the industries in which this was clearly apparent will be the farming and food business.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was clear to majority of men and women that there was a significant effect at the tail end of the chain (e.g., hoarding in supermarkets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the supply chain for which the effect is much less clear. It is thus vital that you find out how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, found food service down It is obvious and widely known that need in the foodservice channels went down as a result of the closure of places, amongst others. In certain cases, sales for vendors of the food service industry thus fell to aproximatelly 20 % of the initial volume. As an adverse reaction, demand in the list channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come through abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was required for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In certain instances, this even meant a complete stop of output (e.g. inside the duck farming industry, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the issues, and expenses that are high for container transport as a consequence. Truck transport experienced different problems. Initially, there were uncertainties regarding how transport would be handled for borders, which in the long run weren’t as strict as feared. What was problematic in cases that are a large number of , however, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the primary elements of supply chain resilience:
Using this framework for the analysis of the interviews, the conclusions show that few companies had been nicely prepared for the corona problems and actually mostly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This appears particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to do so.
Next, it was discovered that much more attention was needed on spreading risk and aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing strategies in cases in which demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to boost market shares wherein competitors miss opportunities. This particular challenge is not new, but it’s in addition been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona issues shows us that the monetary impact of a crisis also relies on the way cooperation in the chain is set up. It is typically unclear exactly how extra expenses (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand and marketing on the other hand, the future must tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?