Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been affected and all industries are touched inside a way or even yet another. One of the industries in which it was clearly apparent is the farming and food industry.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to many men and women that there was a great effect at the tail end of this chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for which the effect is much less clear. It’s therefore vital that you figure out how effectively the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, that is found food service down It’s obvious and widely known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In a few cases, sales for vendors in the food service industry thus fell to aproximatelly 20 % of the initial volume. As a side effect, demand in the retail channels went up and remained within a degree of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come via abroad had the own issues of theirs. With the shift in need from foodservice to retail, the demand for packaging improved dramatically, More tin, cup and plastic was required for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant effect on production activities. In some cases, this even meant a total stop of production (e.g. in the duck farming business, which came to a standstill on account of demand fall-out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is restricted during the earliest weeks of the crisis, and costs which are high for container transport as a result. Truck transport encountered different issues. To begin with, there were uncertainties on how transport will be managed at borders, which in the end weren’t as rigid as feared. What was problematic in cases which are most, nevertheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the key things of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions show that few companies had been well prepared for the corona crisis and actually mostly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This appears particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often do not have the capability to do it.
Next, it was found that much more interest was required on spreading threat and also aiming for risk reduction in the supply chain. For the future, meaning more attention has to be made available to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases where demand cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to improve market shares where competitors miss options. This particular task isn’t new, however, it’s also been underexposed in this specific crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic effect of a crisis also depends on the way cooperation in the chain is actually set up. It is typically unclear precisely how additional expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the classic considerations between logistics and production on the one hand and advertising on the other, the potential future will need to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?