Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. Economic indicators and health have been affected and all industries have been touched inside a way or perhaps another. One of the industries in which this was clearly noticeable is the farming and food business.
In 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was apparent to many individuals that there was a huge effect at the tail end of the chain (e.g., hoarding in food markets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors in the supply chain for that will the effect is much less clear. It is thus vital that you figure out how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also 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 the analysis of theirs on interviews with around 30 Dutch source chain actors.
Demand in retail up, contained food service down It is apparent and well known that need in the foodservice stations went down on account of the closure of places, amongst others. In certain cases, sales for suppliers in the food service industry as a result fell to aproximatelly 20 % of the first volume. Being a complication, demand in the retail channels went up and remained within a degree of about 10-20 % higher than before the problems began.
Goods that had to come from abroad had their own issues. With the shift in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic was needed for use in customer packaging. As more of this packaging material ended up in consumers’ homes rather than in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had an important impact on output activities. In certain cases, this even meant a complete stop of output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out in 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 facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability which is limited during the earliest weeks of the crisis, and expenses which are high for container transport as a result. Truck transportation faced various problems. Initially, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in cases that are most , nevertheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this primary things of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings indicate that few businesses were well prepared for the corona crisis and in reality mainly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the potential to accomplish that.
Second, it was observed that much more interest was needed on spreading threat and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be made available to the way businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations where need can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to improve market shares in which competitors miss options. This particular challenge isn’t new, although it has also been underexposed in this crisis and was usually not a part of preparatory activities.
Fourthly, the corona problems teaches us that the financial effect of a crisis also is determined by the way cooperation in the chain is set up. It is often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional considerations between production and logistics on the one hand as well as advertising on the other hand, the potential future must explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?