Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. Economic indicators and health have been compromised and all industries are touched inside one of the ways or perhaps yet another. One of the industries in which it was clearly visible would be the agriculture and food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to majority of people that there was a big impact at the conclusion of the chain (e.g., hoarding around food markets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for that the effect is less clear. It’s thus vital that you figure out how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food resources chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Need within retail up, found food service down It’s evident and widely known that need in the foodservice channels went down on account of the closure of places, amongst others. In some cases, sales for suppliers of the food service business therefore fell to aproximatelly twenty % of the first volume. As a side effect, demand in the retail stations went up and remained at a degree of aproximatelly 10-20 % higher than before the problems started.
Products which had to come through abroad had their own problems. With the change in need from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was needed for wearing in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a major impact on output activities. In a few cases, this even meant a complete stop of output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is restricted during the first weeks of the crisis, and high expenses for container transport as a direct result. Truck travel encountered various issues. At first, there were uncertainties on how transport will be managed for borders, which in the long run weren’t as stringent as feared. That which was problematic in a large number of instances, however, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this main components of supply chain resilience:
To us this framework for the evaluation of the interviews, the results show that not many organizations were well prepared for the corona problems and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This looks especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the potential to accomplish that.
Second, it was found that much more interest was required on spreading risk and also 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 rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations where need cannot be met. Explicit prioritization is required to continue to meet market expectations but additionally to improve market shares in which competitors miss options. This task isn’t new, though it’s also been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the financial effect of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It’s often unclear exactly how additional costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional considerations between logistics and production on the one hand as well as marketing and advertising on the other, the potential future must explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?