Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been compromised and all industries have been touched in one of the ways or perhaps some other. One of the industries in which it was clearly noticeable would be the farming as well as food business.
In 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover 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 as well as food security as many stakeholders are impacted. Despite the fact that it was clear to numerous people that there was a great impact at the end of the chain (e.g., hoarding in food markets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the source chain for that the impact is less clear. It is thus vital that you determine how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Need in retail up, in food service down It is evident and well known that need in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for vendors in the food service industry as a result fell to aproximatelly 20 % of the original volume. As a complication, demand in the list stations went up and remained within a level of about 10-20 % greater than before the problems began.
Goods that had to come through abroad had their very own problems. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic material was necessary for use in consumer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a major impact on production activities. In a few instances, this even meant a complete stop of production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capacity which is restricted throughout the earliest weeks of the crisis, and expenses that are high for container transport as a result. Truck transportation faced various issues. To begin with, there were uncertainties about how transport would be handled at borders, which in the end were not as strict as feared. That which was problematic in instances that are a large number of , nonetheless, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core elements of supply chain resilience:
Using this framework for the assessment of the interviews, the results show that not many businesses were well prepared for the corona crisis and actually mostly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This appears especially complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capability to do so.
Second, it was discovered that more attention was required on spreading risk and also 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 companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in cases where demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to increase market shares in which competitors miss opportunities. This challenge isn’t new, however, it’s also been underexposed in this specific crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary result of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how further costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the classic discussions between creation and logistics on the one hand and marketing on the other, the long term must explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?