Supply chain – The COVID-19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been affected and all industries have been completely touched in one way or perhaps yet another. One of the industries in which this was clearly visible would be the agriculture and food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was clear to most people that there was a significant effect at the conclusion of the chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors inside the source chain for that the effect is much less clear. It is therefore important to find out how effectively the food supply chain as being a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food resources chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, that is found food service down It’s apparent and well known that demand in the foodservice stations went down on account of the closure of joints, amongst others. In a few cases, sales for vendors of the food service business as a result fell to about 20 % of the first volume. Being an adverse reaction, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the crisis started.
Goods that had to come via abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the demand for packaging changed dramatically, More tin, glass or plastic material was needed for wearing in customer packaging. As more of this product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important impact on output activities. In a few instances, this even meant a full stop in output (e.g. inside the duck farming business, which arrived to a standstill due to demand fall-out on the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in restricted transport capacity throughout the very first weeks of the problems, and costs that are high for container transport as a result. Truck transportation experienced various issues. To begin with, there were uncertainties on how transport would be managed at borders, which in the end weren’t as stringent as feared. The thing that was problematic in cases that are a large number of , nonetheless, was the availability of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main components of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions indicate that not many companies were nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility and versatility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to do it.
Next, it was found that more interest was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be given to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases in which demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but additionally to boost market shares where competitors miss opportunities. This particular task is not new, although it has additionally been underexposed in this specific crisis and was often not a part of preparatory activities.
Fourthly, the corona problems teaches us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is usually unclear precisely how further costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain features are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally change the traditional considerations between logistics and generation on the one hand and marketing on the other hand, the future will have to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?