Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the world. health and Economic indicators have been compromised and all industries have been touched in a way or even some other. One of the industries in which it was clearly visible would be the agriculture and food business.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many people that there was a significant effect at the tail end of the chain (e.g., hoarding doing supermarkets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that will the impact is less clear. It’s thus imperative that you figure out how effectively the food supply chain as a whole is actually armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and from 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 the examination of theirs on interviews with around 30 Dutch source chain actors.
Demand within retail up, found food service down It’s evident and popular that need in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service industry thus fell to aproximatelly 20 % of the original volume. Being a side effect, demand in the list channels went up and remained at a level of about 10-20 % greater than before the crisis began.
Products that had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic material was required for wearing in consumer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in need have had a big effect on output activities. In a few instances, this even meant a complete stop in production (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in limited transport electrical capacity during the very first weeks of the problems, and expenses which are high for container transport as a consequence. Truck travel experienced different issues. At first, there were uncertainties regarding how transport will be managed for borders, which in the long run weren’t as strict as feared. What was problematic in cases which are a large number of, however, was the accessibility of motorists.
The reaction to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key components of supply chain resilience:
To us this framework for the assessment of the interviews, the results indicate that few organizations had been nicely prepared for the corona problems and in reality mainly applied responsive practices. The most notable supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to create the supply chain for flexibility as well as agility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to do so.
Next, it was found that more attention was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, what this means is more attention ought to be provided to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases where demand can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to increase market shares in which competitors miss options. This challenge isn’t new, however, it’s additionally been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona crisis shows us that the economic effect of a crisis in addition depends on the way cooperation in the chain is actually set up. It’s usually unclear how further expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain events. Whether or not 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 long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?