Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been compromised and all industries are touched inside a way or perhaps another. One of the industries in which it was clearly apparent is the agriculture as well as food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was apparent to most people that there was a huge impact at the tail end of this chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for which the effect is less clear. It’s therefore important to determine how effectively the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, that is found food service down It’s obvious and well known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service business therefore fell to aproximatelly 20 % of the first volume. As a complication, demand in the retail stations went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had their own problems. With the change in need from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic material was required for wearing in customer packaging. As much more of this packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a big impact on production activities. In certain instances, this even meant a total stop of production (e.g. in the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity that is restricted throughout the very first weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport encountered various problems. To begin with, there were uncertainties about how transport would be handled for borders, which in the long run were not as stringent as feared. That which was problematic in instances which are most, however, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the core components of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings show that few businesses had been nicely prepared for the corona crisis and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the potential to do so.
Next, it was observed that much more attention was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means far more attention has to be given to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing techniques 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 wherein competitors miss options. This particular challenge is not new, though it’s in addition been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the monetary effect of a crisis additionally relies on the way cooperation in the chain is set up. It is usually unclear how extra costs (and benefits) are sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the classic discussions between logistics and production on the one hand as well as advertising on the other, the long term will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?