Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been touched in one way or even some other. One of the industries in which this was clearly obvious is the farming and food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are affected. Though it was apparent to most individuals that there was a great impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors in the supply chain for which the effect is less clear. It’s thus vital that you find out how effectively the food supply chain as being a whole is armed to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, found food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In some cases, sales for vendors in the food service business therefore fell to about twenty % of the original volume. As an adverse reaction, demand in the list stations went up and remained within a level of aproximatelly 10-20 % higher than before the crisis began.
Goods that had to come via abroad had their own issues. With the change in desire from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic material was needed for wearing in customer packaging. As much more of this packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major affect on production activities. In some cases, this even meant a full stop of output (e.g. in the duck farming business, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is restricted throughout the earliest weeks of the crisis, and high expenses for container transport as a direct result. Truck transport faced various problems. At first, there were uncertainties on how transport would be managed for borders, which in the long run were not as stringent as feared. What was problematic in a large number of situations, nevertheless, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis 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 analysis of the interview, the results indicate that not many businesses had been well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This seems especially complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the potential to accomplish that.
Second, it was discovered that much more attention was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be provided to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases in which demand cannot be met. Explicit prioritization is required to keep on to meet market expectations but in addition to improve market shares in which competitors miss options. This particular challenge is not new, but it has also been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is set up. It’s often unclear exactly how extra costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain functions are in the driving seat 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 change the traditional discussions between production and logistics on the one hand and advertising and marketing on the other, the future must tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?