Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been compromised and all industries are touched in one way or even yet another. One of the industries in which it was clearly noticeable is the agriculture as well as food business.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 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 the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to most folks that there was a big impact at the conclusion of the chain (e.g., hoarding in grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the supply chain for which the impact is much less clear. It is thus important to determine how well the food supply chain as being a whole is prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Demand within retail up, contained food service down It’s obvious and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the initial volume. Being an adverse reaction, demand in the list channels went up and remained within a level of about 10-20 % greater than before the crisis began.
Products that had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup and plastic was necessary for use in consumer packaging. As more of this packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant a complete stop in output (e.g. in the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in restricted transport capability throughout the earliest weeks of the problems, and high expenses for container transport as a result. Truck transportation faced various problems. Initially, there were uncertainties about how transport would be handled for borders, which in the end weren’t as stringent as feared. What was problematic in cases that are most , however, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the core elements of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings indicate that not many businesses were nicely prepared for the corona crisis and actually mainly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for versatility and agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capacity to accomplish that.
Second, it was found that much more attention was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be made available to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to improve market shares wherein competitors miss opportunities. This particular challenge is not new, however, it’s in addition been underexposed in this crisis and was often not a part of preparatory activities.
Fourthly, the corona problems shows you us that the financial impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is usually unclear precisely how additional costs (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional considerations between generation and logistics on the one hand and advertising and marketing on the other hand, the future will have to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?