Supply chain – The COVID-19 pandemic has certainly had its impact impact on the world. health and Economic indicators have been compromised and all industries have been completely touched within one way or perhaps some other. Among the industries in which it was clearly obvious would be the farming 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 industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry 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 significant effects for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was apparent to many folks that there was a huge impact at the tail end of this chain (e.g., hoarding in food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for which the impact is much less clear. It’s thus vital that you determine how properly the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, in food service down It’s evident and popular that need in the foodservice stations went down on account of the closure of places, amongst others. In some instances, sales for vendors of the food service industry therefore fell to aproximatelly 20 % of the initial volume. As a side effect, demand in the retail stations went up and remained at a degree of aproximatelly 10 20 % higher than before the crisis began.
Products which had to come from abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the need for packaging changed dramatically, More tin, cup and plastic material was needed for use in consumer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important affect on output activities. In a few instances, this even meant a total 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 big portion of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capacity during the first weeks of the issues, and high costs for container transport as a direct result. Truck travel experienced various issues. To begin with, there were uncertainties on how transport would be managed for borders, which in the end were not as stringent as feared. The thing that was problematic in situations which are a large number of, however, was the availability of motorists.
The reaction to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary components of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions show that few companies had been nicely prepared for the corona problems and actually mainly applied responsive methods. The most important supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Next, it was observed that much more attention was necessary on spreading risk 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 depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but also to boost market shares wherein competitors miss opportunities. This particular challenge isn’t new, but it’s also been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona crisis shows us that the economic effect of a crisis in addition relies on the way cooperation in the chain is actually set up. It is usually unclear precisely how further expenses (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 functionality are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand and marketing and advertising on the other, the potential future must tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?