Supply chain – The COVID 19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been completely touched in one way or perhaps some other. Among the industries in which it was clearly noticeable would be the farming as well as food industry.
In 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Though it was clear to numerous folks that there was a huge impact at the tail end of the chain (e.g., hoarding in supermarkets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for that the impact is less clear. It is thus vital that you figure out how well the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around 30 Dutch source chain actors.
Demand in retail up, contained food service down It’s obvious and widely known that demand in the foodservice channels went down due to the closure of places, amongst others. In some instances, sales for vendors in the food service business as a result fell to about 20 % of the first volume. Being a complication, demand in the retail channels went up and remained within a quality of about 10-20 % greater than before the crisis started.
Goods that had to come from abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the need for packaging changed considerably, More tin, glass or plastic was necessary for wearing in buyer packaging. As much more of this product packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a significant effect on production activities. In a few cases, this even meant a full stop of production (e.g. in the duck farming industry, which emerged to a standstill due to demand fall out inside the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capability during the earliest weeks of the problems, and high expenses for container transport as a result. Truck transportation faced various issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the long run were not as stringent as feared. That which was problematic in most instances, nonetheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the main components of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions show that not many organizations had been nicely prepared for the corona crisis and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capability to do so.
Next, it was observed that much more interest was needed on spreading danger and aiming for risk reduction inside the supply chain. For the future, what this means is far more attention should be made available to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases where demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to boost market shares wherein competitors miss options. This task is not new, although it’s also been underexposed in this specific problems and was often not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the economic effect of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is often unclear exactly how additional expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain functionality are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand and marketing on the other hand, the future will need to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?