Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the world. Economic indicators and health have been affected and all industries are touched in a way or perhaps some other. One of the industries in which this was clearly visible would be the agriculture as well as food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are affected. Even though it was apparent to numerous folks that there was a huge effect at the end of this chain (e.g., hoarding doing food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the supply chain for that will the effect is less clear. It is thus important to find out how properly the food supply chain as a whole is armed to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, contained food service down It’s obvious and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for vendors in the food service industry thus fell to about 20 % of the first volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the crisis began.
Products which had to come from abroad had their own problems. With the change in need coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic was necessary for use in buyer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a significant impact on output activities. In a few instances, this even meant the full stop in production (e.g. in the duck farming business, which emerged to a standstill due to demand fall out inside the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the crisis, and high costs for container transport as a consequence. Truck transportation experienced various problems. Initially, there were uncertainties on how transport would be managed at borders, which in the end weren’t as stringent as feared. The thing that was problematic in instances which are many, nevertheless, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the primary things of supply chain resilience:
Using this particular framework for the assessment of the interview, the conclusions show that few organizations were well prepared for the corona problems and in fact mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This appears especially challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was observed that much more attention was required on spreading risk and also aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be provided to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which need can’t be met. Explicit prioritization is required to continue to meet market expectations but in addition to improve market shares wherein competitors miss opportunities. This particular task is not new, but it has additionally been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona issues shows us that the economic impact of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is usually unclear how extra costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain features are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the basic considerations between logistics and creation on the one hand and advertising and marketing on the other hand, the future must tell.
How’s the Dutch meal supply chain coping during the corona crisis?