Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or perhaps another. Among the industries in which this was clearly apparent would be the agriculture as well as food industry.
In 2019, the Dutch farming 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 inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to many men and women that there was a great effect at the tail end of the 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), you will find a lot of actors inside the source chain for that will the effect is much less clear. It’s thus vital that you find out how properly the food supply chain as being a whole is prepared to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Need within retail up, in food service down It’s apparent and widely known that need in the foodservice stations went down due to the closure of joints, amongst others. In some cases, sales for vendors in the food service industry thus fell to about 20 % of the initial volume. Being a side effect, demand in the retail stations went up and remained at a quality of aproximatelly 10-20 % greater than before the problems began.
Products which had to come from abroad had their very own issues. With the change in desire from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic was required for wearing in customer packaging. As more of this particular product packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant a full stop of output (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 big part of the personnel contracted corona (e.g. to 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 containers to slow down pretty shortly in 2020. This resulted in restricted transport electrical capacity during the first weeks of the problems, and high costs for container transport as a consequence. Truck travel encountered different problems. Initially, there were uncertainties on how transport will be handled at borders, which in the end were not as strict as feared. The thing that was problematic in instances which are a large number of, however, was the availability of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of this main components of supply chain resilience:
Using this framework for the assessment of the interview, the conclusions indicate that few organizations had been nicely prepared for the corona problems and actually mostly applied responsive practices. Probably the most important source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for agility and versatility. This seems particularly challenging for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to accomplish that.
Next, it was observed that much more attention was required on spreading danger and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be provided to the way companies rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases where demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but additionally to improve market shares where competitors miss options. This task isn’t new, however, it has in addition been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial result of a crisis in addition is determined by the way cooperation in the chain is set up. It is typically unclear exactly how additional costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the classic considerations between logistics and generation on the one hand and advertising and marketing on the other, the long term will need to tell.
How is the Dutch meal supply chain coping during the corona crisis?