Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. health and Economic indicators have been compromised and all industries have been completely touched within a way or yet another. One of the industries in which this was clearly noticeable is the farming as well as food business.
Throughout 2019, the Dutch farming and food niche 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 within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are affected. Even though it was clear to majority of people that there was a huge impact at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the source chain for that will the effect is much less clear. It is therefore imperative that you determine how well the food supply chain as a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Demand within retail up, in food service down It is evident and popular that demand in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to about twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of about 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was necessary for wearing in buyer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In certain instances, this even meant a full stop of output (e.g. in the duck farming industry, which came to a standstill due to demand fall-out in the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is restricted during the very first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transportation experienced different issues. Initially, there were uncertainties on how transport would be handled at borders, which in the long run weren’t as strict as feared. That which was problematic in a large number of cases, nevertheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of this key elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings show that not many businesses were nicely prepared for the corona crisis and actually mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for agility as well as versatility. This appears particularly complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capability to accomplish that.
Second, it was discovered that 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 more attention ought to be given to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing strategies in cases in which demand cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to increase market shares in which competitors miss options. This task is not new, however, it has also been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the economic effect of a crisis also depends on the way cooperation in the chain is actually set up. It’s typically unclear exactly how additional expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand as well as advertising and marketing on the other, the long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?