Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. health and Economic indicators have been affected and all industries have been completely touched inside one way or some other. One of the industries in which it was clearly visible is the agriculture as well as food business.
In 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as many stakeholders are affected. Though it was clear to a lot of folks that there was a big impact at the end of the chain (e.g., hoarding doing grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find many actors in the source chain for that will the effect is much less clear. It’s thus important to determine how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Need within retail up, contained food service down It is evident and popular that demand in the foodservice channels went down as a result of the closure of places, amongst others. In a few instances, sales for vendors in the food service business therefore fell to aproximatelly twenty % of the original volume. Being a complication, demand in the retail channels went up and remained within a degree of about 10-20 % higher than before the problems started.
Products which had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic was required for use in consumer packaging. As more of this particular product packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant impact on output activities. In certain cases, this even meant a total stop in output (e.g. within the duck farming industry, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major part 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 in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in limited transport capacity during the first weeks of the issues, and expenses which are high for container transport as a consequence. Truck travel faced various issues. At first, there were uncertainties regarding how transport would be handled at borders, which in the end were not as strict as feared. What was problematic in instances which are a large number of, nonetheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this primary components of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions indicate that not many businesses had been nicely prepared for the corona crisis and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This seems especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capability to accomplish that.
Second, it was found that much more interest was needed on spreading threat and aiming for risk reduction in the supply chain. For the future, what this means is more attention should be made available to the way companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing strategies in cases where need can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but also to improve market shares in which competitors miss options. This challenge isn’t new, though it’s in addition been underexposed in this problems and was usually not part of preparatory activities.
Fourthly, the corona problems shows us that the economic impact of a crisis in addition depends on the way cooperation in the chain is set up. It’s typically unclear how extra costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally switch the basic discussions between production and logistics on the one hand as well as advertising and marketing on the other hand, the potential future will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?