Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been affected and all industries have been completely touched within a way or perhaps another. Among the industries in which this was clearly apparent will be the agriculture and food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality trade 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 major effects for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was apparent to numerous individuals that there was a significant effect at the end of the chain (e.g., hoarding doing food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the source chain for that the impact is much less clear. It is thus important to find out how properly the food supply chain as a whole is equipped to deal 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 influences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is apparent and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service industry as a result fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the list stations went up and remained at a quality of about 10 20 % greater than before the problems began.
Products which had to come from abroad had their own problems. With the shift in desire from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was needed for use in consumer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a significant impact on output activities. In some cases, this even meant the full stop of output (e.g. in the duck farming business, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is restricted during the first weeks of the crisis, and high costs for container transport as a result. Truck transportation experienced different issues. Initially, there were uncertainties about how transport will be managed for borders, which in the long run weren’t as rigid as feared. That which was problematic in instances which are most, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this core components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings show that not many organizations were well prepared for the corona crisis and in fact mainly applied responsive methods. The most notable 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 flexibility and agility. This seems particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the capability to do it.
Next, it was observed that much more interest was necessary on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention ought to be provided to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in cases in which need can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to increase market shares wherein competitors miss options. This challenge isn’t new, although it’s also been underexposed in this specific problems and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the monetary result of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It’s typically unclear how extra costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functions are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally replace the basic considerations between creation and logistics on the one hand and advertising and marketing on the other hand, the long term will have to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?