Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been completely touched inside one way or yet another. One of the industries in which it was clearly noticeable would be the agriculture as well as food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are impacted. Even though it was apparent to most people that there was a significant impact at the tail end of this chain (e.g., hoarding doing grocery stores, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for which the impact is much less clear. It’s thus vital that you find out how well the food supply chain as a whole is armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Need in retail up, contained food service down It’s apparent and well known that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In a few cases, sales for vendors of the food service industry therefore fell to aproximatelly 20 % of the first volume. As a complication, demand in the retail stations went up and remained within a degree of aproximatelly 10 20 % greater than before the crisis started.
Products which had to come from abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic was needed for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a big impact on production activities. In a few cases, this even meant the full stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a significant 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 beginning of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in limited transport capacity throughout the very first weeks of the crisis, and costs which are high for container transport as a consequence. Truck transport faced various issues. Initially, there were uncertainties about how transport would be managed at borders, which in the long run weren’t as strict as feared. The thing that was problematic in most instances, however, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key things of supply chain resilience:
To us this particular framework for the analysis of the interviews, the results indicate that not many companies had been nicely prepared for the corona crisis and actually mainly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to design the supply chain for agility and flexibility. This appears especially complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was observed that more attention was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to boost market shares where competitors miss options. This task is not new, however, it has additionally been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is often unclear how additional costs (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic discussions between creation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?