Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched in one way or perhaps some other. Among the industries in which it was clearly noticeable would be the agriculture as well as food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its 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 a lot of stakeholders are affected. Despite the fact that it was apparent to most people that there was a significant effect at the conclusion of this chain (e.g., hoarding around food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the supply chain for which the impact is less clear. It is thus vital that you figure out how well the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, in food service down It is apparent and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In a few cases, sales for vendors in the food service business therefore fell to about twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained within a level of about 10 20 % greater than before the crisis started.
Goods that had to come from abroad had their very own problems. With the shift in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was needed for use in buyer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important effect on output activities. In certain instances, this even meant a total stop of output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out inside the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity that is limited throughout the earliest weeks of the issues, and expenses which are high for container transport as a consequence. Truck transportation encountered various problems. At first, there were uncertainties on how transport would be handled at borders, which in the long run were not as stringent as feared. The thing that was problematic in cases which are a large number of, however, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this main things of supply chain resilience:
To us this particular framework for the analysis of the interviews, the results indicate that few companies had been nicely prepared for the corona problems and in fact mostly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This appears especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capacity to do so.
Second, it was discovered that more attention was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention should be provided to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in situations in which demand can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to boost market shares where competitors miss options. This particular task is not new, however, it has in addition been underexposed in this specific crisis and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the financial result of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It is typically unclear how additional expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand and marketing on the other, the potential future will have to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?