Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been completely touched in a way or even another. Among the industries in which this was clearly obvious will be the farming as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to numerous folks that there was a great impact at the end of the chain (e.g., hoarding doing supermarkets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are many actors within the supply chain for that will the impact is less clear. It’s thus vital that you determine how effectively the food supply chain as a whole is actually prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also out of 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 analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, found food service down It is evident and widely known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service business therefore fell to about twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of about 10-20 % higher than before the crisis started.
Products that had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic was needed for wearing in customer packaging. As much more of this product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had an important affect on production activities. In some cases, this even meant a total stop of output (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall out in the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the issues, and high costs for container transport as a direct result. Truck transportation faced different problems. At first, there were uncertainties on how transport will be managed at borders, which in the end were not as stringent as feared. What was problematic in a large number of instances, however, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the core elements of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings show that not many businesses had been nicely prepared for the corona crisis and in reality mainly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This looks especially challenging for small companies: building resilience right 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 discovered that more attention was necessary on spreading danger and aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to continue to meet market expectations but additionally to increase market shares where competitors miss opportunities. This task is not new, however, it’s additionally been underexposed in this problems and was usually not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic impact of a crisis also depends on the way cooperation in the chain is set up. It is often unclear how further costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain operates 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 pursuits. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand and advertising on the other, the potential future will need to tell.
How’s the Dutch meal supply chain coping during the corona crisis?