Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched within one way or perhaps yet another. One of the industries in which this was clearly apparent is the farming as well as food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to majority of men and women that there was a big impact at the tail end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors in the supply chain for that will the effect is much less clear. It’s thus imperative that you determine how properly the food supply chain as a whole is prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need within retail up, found food service down It’s apparent and well known that demand in the foodservice stations went down due to the closure of joints, amongst others. In a few cases, sales for suppliers of the food service business therefore fell to about 20 % of the original volume. Being an adverse reaction, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % higher than before the crisis started.
Goods that had to come from 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, glass or plastic material was needed for use in buyer packaging. As much more of this product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a big impact on production activities. In some instances, this even meant a full stop in production (e.g. within the duck farming industry, which came to a standstill on account of demand fall out inside the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
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 soon in 2020. This resulted in restricted transport capability throughout the earliest weeks of the issues, and expenses that are high for container transport as a result. Truck transportation encountered different problems. At first, there were uncertainties on how transport would be handled for borders, which in the end were not as stringent as feared. That which was problematic in cases that are most , however, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the findings show that not many organizations had been well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This seems especially challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capability to do it.
Next, it was discovered that more interest was needed on spreading risk 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 necessary for explicit prioritization and intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but also to increase market shares where competitors miss options. This task is not new, although it’s in addition been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona issues teaches 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 typically unclear precisely how additional costs (and benefits) are actually sent out in a chain, if 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 marketing and advertising activities have to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally replace the basic considerations between logistics and creation on the one hand as well as marketing on the other, the long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?