Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been affected and all industries have been completely touched inside one of the ways or another. Among the industries in which it was clearly visible will be the farming and food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to numerous people that there was a huge effect at the conclusion of this chain (e.g., hoarding around food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for that the effect is less clear. It’s therefore imperative that you figure out how well the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, contained food service down It’s obvious and popular that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In some cases, sales for vendors in the food service industry therefore fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the retail stations went up and remained at a quality of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come via abroad had their very own issues. With the change in demand from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic was necessary for wearing in consumer packaging. As much more of this particular product packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a significant impact on production activities. In a few instances, this even meant a full stop in output (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in restricted transport capability during the earliest weeks of the problems, and high costs for container transport as a result. Truck transport faced various issues. Initially, there were uncertainties on how transport would be managed for borders, which in the end weren’t as strict as feared. That which was problematic in situations which are most, nevertheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, 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 conclusions show that not many businesses were well prepared for the corona problems and in reality mostly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to design the supply chain for agility and versatility. This seems particularly complicated for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the potential to accomplish that.
Next, it was discovered that much more interest was required on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means more attention should be given to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing strategies in situations where demand cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to boost market shares wherein competitors miss opportunities. This task isn’t new, however, it has additionally been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic impact of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is often unclear how additional costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally change the classic considerations between generation and logistics on the one hand as well as marketing on the other hand, the long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?