Supply chain – The COVID-19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been compromised and all industries have been completely touched within one way or perhaps another. One of the industries in which it was clearly noticeable is the agriculture as well as food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was apparent to a lot of people that there was a great impact at the tail end of this chain (e.g., hoarding in food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for that will the impact is less clear. It’s therefore imperative that you figure out how well the food supply chain as a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need within retail up, found food service down It is evident and well known that demand in the foodservice stations went down due to the closure of places, amongst others. In some instances, sales for suppliers in the food service business thus fell to about 20 % of the first volume. As a complication, demand in the list channels went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis began.
Products that had to come from abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic material was required for use in customer packaging. As much more of this packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a big effect on production activities. In a few instances, this even meant a full stop in output (e.g. within the duck farming industry, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and costs that are high for container transport as a result. Truck transport experienced different problems. To begin with, there were uncertainties regarding how transport would be handled at borders, which in the end weren’t as stringent as feared. The thing that was problematic in many cases, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key things of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions show that not many organizations were well prepared for the corona problems and in fact mostly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capacity to accomplish that.
Next, it was found that much more attention was needed on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning more attention should be given to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations where demand can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but also to increase market shares wherein competitors miss options. This challenge isn’t new, although it’s in addition been underexposed in this specific crisis and was often not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial impact of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is typically unclear precisely how extra expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functions 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 or not the corona pandemic will structurally switch the traditional discussions between logistics and production on the one hand as well as advertising and marketing on the other hand, the long term will need to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?