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 inside one of the ways or even yet another. One of the industries in which this was clearly obvious would be the farming as well as food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was apparent to most folks that there was a huge effect at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the source chain for that will the effect is much less clear. It’s thus important to figure out how properly the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, found food service down It is evident and well known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the original volume. Being a complication, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % greater than before the problems began.
Products which had to come via abroad had the own problems of theirs. With the shift in demand from foodservice to retail, the need for packaging changed dramatically, More tin, cup and plastic was necessary for use in customer packaging. As more of this product packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a significant effect on output activities. In certain instances, this even meant a total stop of production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out on the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited during the very first weeks of the issues, and costs that are high for container transport as a result. Truck transportation faced different issues. To begin with, there were uncertainties on how transport will be managed at borders, which in the end were not as rigid as feared. The thing that was problematic in most instances, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core things of supply chain resilience:
Using this particular framework for the assessment of the interview, the findings indicate that not many businesses had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capacity to do it.
Second, it was discovered that more interest was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be provided to the way businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to improve market shares wherein competitors miss options. This particular task is not new, but it has additionally been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the financial result of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It’s usually unclear exactly how further expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally change the basic discussions between logistics and production on the one hand and marketing on the other hand, the long term must tell.
How’s the Dutch meal supply chain coping during the corona crisis?