Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been affected and all industries are touched within one of the ways or another. One of the industries in which it was clearly apparent would be the agriculture and food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was apparent to numerous folks that there was a great impact at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the source chain for that the impact is much less clear. It’s therefore imperative that you figure out how well the food supply chain as being a whole is prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is evident and popular that demand in the foodservice channels went down due to the closure of joints, amongst others. In certain instances, sales for vendors of the food service business as a result fell to about twenty % of the first volume. Being a complication, demand in the list channels went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the change in desire from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic material was necessary for wearing in consumer packaging. As much more of this particular product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a big effect on output activities. In some cases, this even meant a full stop in production (e.g. in the duck farming industry, which came to a standstill due to demand fall out inside the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport capacity during the very first weeks of the problems, and high costs for container transport as a direct result. Truck transportation faced various issues. Initially, there were uncertainties on how transport would be handled for borders, which in the end weren’t as rigid as feared. The thing that was problematic in many cases, nevertheless, was the availability of motorists.
The response to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary things of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions show that not many companies had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for versatility and agility. This looks especially challenging for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capability to do it.
Next, it was found that much more interest was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be made available to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in cases where demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but in addition to increase market shares wherein competitors miss options. This task isn’t new, although it has in addition been underexposed in this specific problems and was usually not part of preparatory activities.
Fourthly, the corona problems teaches us that the monetary result of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s typically unclear exactly how additional costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally change the basic considerations between logistics and generation on the one hand as well as advertising on the other, the long term must tell.
How is the Dutch meal supply chain coping throughout the corona crisis?