Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been completely touched within a way or perhaps yet another. Among the industries in which this was clearly obvious is the farming as well as food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to a lot of people that there was a significant impact at the tail end of this chain (e.g., hoarding doing food markets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors in the source chain for which the effect is much less clear. It’s therefore important to figure out how well the food supply chain as a whole is equipped to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need within retail up, contained food service down It’s evident and widely known that demand in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service business therefore fell to about 20 % of the initial volume. Being a side effect, demand in the list stations went up and remained within a level of about 10-20 % higher than before the crisis started.
Products which had to come via abroad had their very own problems. With the change in demand coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was needed for use in buyer packaging. As much more of this packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a major effect on production activities. In certain instances, this even meant a total stop of output (e.g. within the duck farming industry, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in restricted transport capacity throughout the very first weeks of the problems, and high expenses for container transport as a direct result. Truck travel encountered different problems. To begin with, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as stringent as feared. That which was problematic in many situations, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the main things of supply chain resilience:
Using this framework for the analysis of the interview, the results indicate that not many businesses were nicely prepared for the corona crisis and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This seems particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to do so.
Second, it was discovered that much more attention was necessary on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be provided to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in situations where need cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to boost market shares where competitors miss options. This task is not new, but it has also been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona issues teaches us that the monetary effect of a crisis also is determined by the manner in which cooperation in the chain is set up. It is typically unclear how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the basic discussions between creation and logistics on the one hand as well as advertising and marketing on the other hand, the future will need to tell.
How’s the Dutch meal supply chain coping during the corona crisis?