Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. Economic indicators and health have been affected and all industries have been touched within one of the ways or some other. One of the industries in which it was clearly obvious will be the farming and food business.
In 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to many individuals that there was a big impact at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for that will the effect is much less clear. It is therefore imperative that you figure out how effectively the food supply chain as a whole is actually equipped to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, in food service down It is apparent and widely known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain cases, sales for suppliers in the food service industry therefore fell to about 20 % of the first volume. Being an adverse reaction, demand in the list channels went up and remained within a degree of about 10 20 % greater than before the crisis began.
Products which had to come from abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup and plastic material was needed for use in consumer packaging. As much more of this packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a major effect on output activities. In some instances, this even meant the full stop of output (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted throughout the first weeks of the issues, and high expenses for container transport as a result. Truck transportation experienced different problems. Initially, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as strict as feared. That which was problematic in situations that are a large number of , nevertheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the key components of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions show that not many businesses had been nicely prepared for the corona crisis and actually mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
First, the need to design the supply chain for versatility and agility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the potential to do it.
Second, it was discovered that much more attention was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be provided to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in cases where need can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but also to boost market shares in which competitors miss opportunities. This particular challenge isn’t new, although it has also been underexposed in this crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows us that the economic effect of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is usually unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally change the basic considerations between production and logistics on the one hand and advertising and marketing on the other, the long term must tell.
How’s the Dutch meal supply chain coping during the corona crisis?