Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been affected and all industries are touched in a way or yet another. Among the industries in which it was clearly noticeable will be the farming as well as food business.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to majority of individuals that there was a great impact at the end of the chain (e.g., hoarding around supermarkets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for which the effect is less clear. It is thus important to figure out how well the food supply chain as a whole is actually prepared to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, contained food service down It is evident and widely known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In some instances, sales for vendors of the food service business as a result fell to aproximatelly twenty % of the first volume. As a side effect, demand in the list channels went up and remained within a level of about 10 20 % greater than before the problems began.
Products that had to come via abroad had the own issues of theirs. With the shift in need from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup or plastic was needed for use in buyer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had an important impact on output activities. In certain cases, this even meant a total stop in production (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity which is restricted during the first weeks of the issues, and expenses which are high for container transport as a result. Truck travel experienced various issues. To begin with, there were uncertainties about how transport would be handled at borders, which in the end were not as strict as feared. That which was problematic in situations which are most, however, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions indicate that few companies had been nicely prepared for the corona crisis and in fact 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 flexibility and agility. This seems especially complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capability to do it.
Next, it was found that more interest was needed on spreading risk 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 way companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to improve market shares where competitors miss opportunities. This particular task is not new, however, it’s also been underexposed in this specific problems and was frequently not part of preparatory activities.
Fourthly, the corona problems shows us that the monetary result of a crisis also is determined by the manner in which cooperation in the chain is set up. It is typically unclear exactly how further expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional discussions between creation and logistics on the one hand as well as marketing on the other, the long term will need to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?