Supply chain – The COVID-19 pandemic has definitely had its impact effect on the world. Economic indicators and health have been compromised and all industries have been touched within one way or even some other. One of the industries in which this was clearly visible would be the farming as well as food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 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 enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was clear to most men and women that there was a huge impact at the conclusion of the chain (e.g., hoarding in supermarkets, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that will the effect is much less clear. It is thus vital that you find out how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, that is found food service down It’s obvious and well known that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service business thus fell to aproximatelly 20 % of the initial volume. Being an adverse reaction, demand in the retail channels went up and remained within a degree of about 10-20 % higher than before the crisis started.
Products which had to come from abroad had the own issues of theirs. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, glass or plastic material was necessary for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a big affect on production activities. In some cases, this even meant a complete stop in output (e.g. inside the duck farming business, which came to a standstill due to demand fall-out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in restricted transport electrical capacity throughout the earliest weeks of the problems, and expenses which are high for container transport as a direct result. Truck travel encountered various problems. At first, there were uncertainties about how transport would be handled at borders, which in the long run were not as rigid as feared. That which was problematic in a large number of cases, nonetheless, was the availability of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the results show that not many companies were well prepared for the corona problems and in fact mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This appears particularly challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to do so.
Second, it was discovered that much more attention was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, this means more attention should be provided to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in situations in which need cannot be met. Explicit prioritization is required to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss opportunities. This challenge isn’t new, though it has also been underexposed in this problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic effect of a crisis also relies on the way cooperation in the chain is set up. It is typically unclear exactly how further costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally change the traditional discussions between production and logistics on the one hand as well as advertising on the other hand, the future must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?