Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the world. health and Economic indicators have been compromised and all industries are touched in one of the ways or another. Among the industries in which it was clearly noticeable will be the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business 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 same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to majority of folks that there was a significant impact at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and also 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 less clear. It’s therefore vital that you find out how well the food supply chain as a whole is armed to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It is apparent and well known that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service business thus fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the retail channels went up and remained within a degree of about 10-20 % greater than before the crisis started.
Goods that had to come through abroad had the own issues of theirs. With the change in desire from foodservice to retail, the need for packaging changed dramatically, More tin, cup and plastic material was necessary for wearing in buyer packaging. As much more of this product packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had an important impact on production activities. In a few cases, this even meant the full stop of production (e.g. in the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity that is limited throughout the first weeks of the problems, and expenses which are high for container transport as a direct result. Truck transportation experienced different problems. To begin with, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as stringent as feared. That which was problematic in situations which are a large number of, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the primary elements of supply chain resilience:
Using this particular framework for the analysis of the interviews, the findings show that few companies had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as versatility. This appears especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the potential to accomplish that.
Next, it was discovered that more interest was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in situations where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This particular task isn’t new, although it’s additionally been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the financial impact of a crisis also depends on the way cooperation in the chain is actually set up. It is usually unclear exactly how further costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain functionality are in the driving seat during a crisis. Product development and advertising and marketing 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 logistics and generation on the one hand and marketing and advertising on the other, the potential future will need to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?