Supply chain – The COVID 19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been affected and all industries have been completely touched in one of the ways or yet another. Among the industries in which it was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced 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. Though it was apparent to numerous men and women that there was a significant effect at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that the effect is less clear. It’s therefore vital that you figure out how properly the food supply chain as a whole is armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as 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 the examination of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, contained food service down It’s evident and well known that need in the foodservice stations went down due to the closure of places, amongst others. In certain cases, sales for vendors in the food service business as a result fell to about twenty % of the first volume. Being a complication, demand in the retail stations went up and remained within a degree of about 10-20 % higher than before the problems began.
Products that had to come from abroad had their own problems. With the shift in desire coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup or plastic was needed for wearing in customer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a major effect on production activities. In some instances, this even meant the full stop of output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), resulting in 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 fairly shortly in 2020. This resulted in transport capability that is limited during the earliest weeks of the crisis, and costs that are high for container transport as a direct result. Truck travel encountered various issues. To begin with, there were uncertainties regarding how transport would be managed for borders, which in the end were not as rigid as feared. That which was problematic in instances that are most , nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the key elements of supply chain resilience:
Using this particular framework for the assessment of the interview, the findings show that not many organizations were well prepared for the corona crisis and in reality mainly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capacity to do so.
Next, it was discovered that much more attention was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention should be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in situations where need cannot be met. Explicit prioritization is needed to keep on to meet market expectations but also to boost market shares in which competitors miss options. This task is not new, however, it’s additionally been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows us that the economic impact of a crisis also relies on the manner in which cooperation in the chain is set up. It’s often unclear how extra expenses (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional discussions between production and logistics on the one hand and advertising and marketing on the other, the future must explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?