Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. health and Economic indicators have been compromised and all industries are touched in one of the ways or another. One of the industries in which this was clearly apparent would be the agriculture and food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its 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 major consequences for the Dutch economy and food security as many stakeholders are impacted. Even though it was apparent to majority of men and women that there was a significant impact at the conclusion of this chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the supply chain for that the impact is much less clear. It is thus important to figure out how well the food supply chain as a whole is actually armed to cope with disruptions. Researchers from your 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 consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, in food service down It is evident and popular that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service industry therefore fell to about 20 % of the first volume. Being a side effect, demand in the list channels went up and remained at a level of about 10-20 % greater than before the problems started.
Products that had to come through abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup or plastic material was necessary for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a major affect on output activities. In some cases, this even meant a total stop of production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the problems, and expenses that are high for container transport as a consequence. Truck travel experienced different issues. At first, there were uncertainties regarding how transport would be managed for borders, which in the end were not as strict as feared. The thing that was problematic in instances that are a large number of , 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 used on the overview of the key elements of supply chain resilience:
To us this particular framework for the assessment of the interviews, the results indicate that few businesses were nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to create the supply chain for agility and versatility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the potential to do so.
Second, it was observed that more interest was required on spreading danger and aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be made available to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing techniques in situations where demand 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 opportunities. This particular challenge is not new, but it’s in addition been underexposed in this specific problems and was frequently not part of preparatory activities.
Fourthly, the corona problems teaches us that the monetary effect of a crisis also relies on the way cooperation in the chain is set up. It’s typically unclear exactly how extra costs (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the classic discussions between production and logistics on the one hand as well as advertising and marketing on the other hand, the long term will have to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?