Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the planet. Economic indicators and health have been affected and all industries have been touched inside a way or some other. One of the industries in which it was clearly apparent is the agriculture and food industry.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to majority of men and women that there was a significant impact at the end of the chain (e.g., hoarding in supermarkets, eateries closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the supply chain for that will the impact is much less clear. It is therefore important to determine how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Need within retail up, that is found food service down It is obvious and widely known that need in the foodservice channels went down on account of the closure of joints, amongst others. In a few instances, sales for vendors of the food service business thus fell to about 20 % of the first volume. Being an adverse reaction, demand in the list stations went up and remained within a level of aproximatelly 10 20 % greater than before the problems began.
Products which had to come from abroad had the own problems of theirs. With the change in need from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic material was required for use in consumer packaging. As much more of this particular packaging material ended up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major affect on production activities. In a few instances, this even meant the full stop of production (e.g. in 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 portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in limited transport capacity during the very first weeks of the problems, and high costs for container transport as a result. Truck transportation experienced various problems. Initially, there were uncertainties regarding how transport would be handled at borders, which in the end were not as stringent as feared. The thing that was problematic in instances which are many, nonetheless, was the availability of motorists.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this main components of supply chain resilience:
To us this particular framework for the analysis of the interview, the results indicate that not many businesses were nicely prepared for the corona problems and in reality mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
For starters, the need to develop the supply chain for agility as well as versatility. This appears especially complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was found that much more interest was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be made available to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in situations where need can’t be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss options. This particular challenge isn’t new, though it has in addition been underexposed in this specific problems and was usually not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic impact of a crisis additionally depends on the manner in which cooperation in the chain is set up. It is usually unclear exactly how extra costs (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional considerations between production and logistics on the one hand and advertising on the other hand, the potential future must tell.
How’s the Dutch meal supply chain coping during the corona crisis?