Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the planet. Economic indicators and health have been affected and all industries are touched inside one of the ways or perhaps some other. One of the industries in which it was clearly noticeable will be the agriculture as well as food industry.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to many individuals that there was a big impact at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that will the impact is less clear. It’s thus vital that you determine how well the food supply chain as a whole is actually armed to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food supplies chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Demand in retail up, found food service down It is evident and well known that demand in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for vendors in the food service business thus fell to about 20 % of the original volume. Being a side effect, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % greater than before the problems began.
Products which had to come from abroad had their own problems. With the change in demand coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was required for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant impact on production activities. In a few instances, this even meant the full stop of output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the problems, and costs that are high for container transport as a result. Truck travel encountered different issues. Initially, there were uncertainties regarding how transport will be handled at borders, which in the long run weren’t as stringent as feared. That which was problematic in instances which are many, nevertheless, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the results show that few businesses had been well prepared for the corona problems and actually mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for versatility as well as agility. This looks especially complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do it.
Next, it was discovered that much more interest was required on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning far more attention should be given to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to boost market shares wherein competitors miss opportunities. This particular challenge is not new, though it’s also been underexposed in this problems and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the monetary impact of a crisis in addition relies on the way cooperation in the chain is actually set up. It is typically unclear how further expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally replace the traditional discussions between production and logistics on the one hand as well as advertising on the other hand, the long term will need to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?