Supply chain – The COVID 19 pandemic has definitely had its impact impact on the planet. health and Economic indicators have been compromised and all industries are touched in one of the ways or even another. One of the industries in which this was clearly noticeable will be the agriculture as well as food industry.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was apparent to most individuals that there was a huge effect at the end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the supply chain for that the effect is less clear. It is thus imperative that you figure out how properly the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand in retail up, in food service down It is obvious and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In certain instances, sales for vendors in the food service industry therefore fell to aproximatelly 20 % of the initial volume. As a complication, 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 their very own problems. With the shift in need coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic material was necessary for use in consumer packaging. As more of this particular product packaging material ended up in consumers’ houses instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had an important affect on production activities. In a few cases, this even meant a total stop of output (e.g. within the duck farming business, which came to a standstill as a result of demand fall-out in the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability that is restricted throughout the first weeks of the problems, and costs which are high for container transport as a consequence. Truck transport encountered various issues. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the end were not as strict as feared. The thing that was problematic in most instances, however, was the accessibility of drivers.
The reaction 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 core components of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings indicate that few businesses were well prepared for the corona crisis and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the potential to accomplish that.
Second, it was observed that much more interest was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be made available to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing strategies in situations where demand cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to increase market shares in which competitors miss options. This task is not new, though it’s in addition been underexposed in this crisis and was usually not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic result of a crisis also depends on the manner in which cooperation in the chain is set up. It is often unclear exactly how additional costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the basic considerations between generation and logistics on the one hand as well as marketing and advertising on the other hand, the future will need to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?