Supply chain – The COVID 19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been affected and all industries have been completely touched in one way or even another. Among the industries in which this was clearly noticeable is the agriculture and food business.
In 2019, the Dutch farming and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was clear to numerous individuals that there was a great impact at the conclusion of this chain (e.g., hoarding doing grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors within the supply chain for that the impact is much less clear. It’s therefore important to determine how effectively the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food supply chain. They based their examination on interviews with around thirty Dutch source chain actors.
Need within retail up, found food service down It is apparent and popular that need in the foodservice channels went down as a result of the closure of places, amongst others. In some instances, sales for vendors in the food service industry as a result fell to about twenty % of the original volume. As a side effect, demand in the list stations went up and remained within a degree of about 10 20 % greater than before the problems began.
Products that had to come through abroad had their own problems. With the shift in demand coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic was needed for use in consumer packaging. As more of this particular product packaging material ended up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had an important affect on production activities. In a few cases, this even meant a total stop of output (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out on the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning 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 limited during the very first weeks of the issues, and costs that are high for container transport as a consequence. Truck transport faced various issues. To begin with, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as rigid as feared. That which was problematic in situations which are most, nevertheless, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the core elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the results show that not many companies had been well prepared for the corona problems and in reality mostly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This appears particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the potential to do it.
Second, it was observed that more attention was necessary on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be made available to the way companies depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing strategies in situations in which need cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss opportunities. This particular challenge isn’t new, however, it has in addition been underexposed in this specific problems and was frequently not part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the economic result of a crisis also depends on the way cooperation in the chain is actually set up. It is usually unclear precisely how further costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the basic considerations between generation and logistics on the one hand as well as marketing on the other hand, the potential future will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?