Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been compromised and all industries have been completely touched inside one of the ways or even another. One of the industries in which it was clearly obvious would be the agriculture as well as food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was clear to majority of individuals that there was a huge impact at the end of this chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the source chain for that the impact is less clear. It is therefore important to determine how properly the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food resources chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Need within retail up, that is found food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In a few instances, sales for vendors in the food service industry therefore fell to about 20 % of the original volume. Being a side effect, demand in the list channels went up and remained at a quality of about 10 20 % greater than before the problems began.
Products that had to come from abroad had their very own issues. With the change in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was necessary for use in customer packaging. As much more of this product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a big impact on production activities. In some instances, this even meant the full stop in production (e.g. in the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capability that is limited throughout the very first weeks of the crisis, and high expenses for container transport as a consequence. Truck transportation encountered different problems. Initially, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as strict as feared. That which was problematic in cases which are most, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this core things of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions indicate that few businesses were well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This seems especially challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capacity to accomplish that.
Next, it was found that much more interest was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be made available to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in cases in which need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to improve market shares wherein competitors miss options. This task is not new, although it’s also been underexposed in this specific crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic result of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It’s often unclear precisely how extra expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the traditional considerations between production and logistics on the one hand as well as advertising on the other, the future will need to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?