Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been completely touched inside one way or some other. One of the industries in which this was clearly visible will be the farming as well as food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was clear to a lot of men and women that there was a big effect at the conclusion of this chain (e.g., hoarding around supermarkets, eateries 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 source chain for that will the effect is less clear. It’s therefore vital that you find out how well the food supply chain as a whole is equipped to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with about 30 Dutch source chain actors.
Demand within retail up, that is found food service down It’s apparent and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In a few instances, sales for vendors in the food service industry thus fell to aproximatelly twenty % of the original volume. As a side effect, demand in the retail stations went up and remained at a level of about 10-20 % greater than before the problems started.
Products which had to come from abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was necessary for wearing in buyer packaging. As more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a big impact on output activities. In a few instances, this even meant the full stop in production (e.g. inside the duck farming industry, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport electrical capacity during the very first weeks of the crisis, and costs that are high for container transport as a result. Truck transportation faced various problems. At first, there were uncertainties about how transport will be handled for borders, which in the long run were not as stringent as feared. That which was problematic in cases that are many , however, was the accessibility of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the primary components of supply chain resilience:
Using this particular framework for the evaluation of the interview, the results indicate that few businesses were well prepared for the corona crisis and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This appears especially complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was observed that more attention was needed on spreading danger and also aiming for risk reduction inside the supply chain. For the future, this means far more attention has to be given to the way organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in situations in which demand can’t be met. Explicit prioritization is actually necessary to continue to meet market expectations but in addition to increase market shares where competitors miss opportunities. This particular task is not new, but it’s in addition been underexposed in this crisis and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s often unclear exactly how additional costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally replace the basic considerations between production and logistics on the one hand as well as marketing on the other hand, the future will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?