Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been touched in one of the ways or even yet another. Among the industries in which it was clearly apparent will be the agriculture and food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was apparent to a lot of men and women that there was a huge impact at the tail end of this chain (e.g., hoarding in food markets, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for that the impact is less clear. It’s thus imperative that you find out how effectively the food supply chain as being a whole is armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, in food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of places, amongst others. In a few cases, sales for suppliers in the food service industry therefore fell to aproximatelly 20 % of the original volume. As an adverse reaction, demand in the list channels went up and remained at a quality of about 10 20 % higher than before the crisis began.
Products which had to come through abroad had the own problems of theirs. With the shift in desire from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was needed for use in buyer packaging. As much more of this particular product packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had an important affect on production activities. In a few instances, this even meant a full stop of output (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity throughout the earliest weeks of the issues, and high costs for container transport as a consequence. Truck transportation faced different problems. Initially, there were uncertainties about how transport would be handled at borders, which in the end weren’t as strict as feared. The thing that was problematic in most instances, nonetheless, was the availability of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the core components of supply chain resilience:
To us this particular framework for the assessment of the interviews, the results show that few organizations were well prepared for the corona crisis and actually mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capacity to accomplish that.
Second, it was discovered that much more attention was necessary on spreading threat as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be made available to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases in which demand can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to boost market shares where competitors miss opportunities. This challenge isn’t new, though it has in addition been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona problems shows us that the economic impact of a crisis in addition relies on the way cooperation in the chain is set up. It is typically unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally switch the classic discussions between creation and logistics on the one hand as well as marketing on the other hand, the potential future will need to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?