Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been completely touched in one way or perhaps yet another. Among the industries in which this was clearly obvious would be the agriculture as well as food business.
In 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are affected. Despite the fact that it was apparent to most men and women that there was a big impact at the conclusion of the chain (e.g., hoarding doing supermarkets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that the effect is less clear. It is therefore important to determine how effectively the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand in retail up, found food service down It’s obvious and well known that need in the foodservice stations went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business therefore fell to aproximatelly 20 % of the original volume. Being a complication, demand in the retail stations went up and remained within a level of aproximatelly 10 20 % higher than before the problems started.
Products that had to come via abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was necessary for wearing in buyer packaging. As more of this packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a big affect on output activities. In a few cases, this even meant the full stop of output (e.g. inside the duck farming industry, which emerged to a standstill due to demand fall out in the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in limited transport capacity throughout the first weeks of the problems, and costs that are high for container transport as a consequence. Truck transportation encountered different problems. At first, there were uncertainties regarding how transport would be handled for borders, which in the end weren’t as strict as feared. The thing that was problematic in a large number of situations, however, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the main components of supply chain resilience:
Using this framework for the evaluation of the interviews, the results indicate that few businesses were nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for agility as well as flexibility. This looks especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to do it.
Second, it was observed that more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be provided to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases where demand cannot be met. Explicit prioritization is necessary to continue to meet market expectations but additionally to increase market shares wherein competitors miss options. This particular challenge is not new, though it’s also been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary impact of a crisis also is determined by the manner in which cooperation in the chain is set up. It’s typically unclear how extra expenses (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional considerations between logistics and production on the one hand as well as advertising on the other, the potential future will have to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?