Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries are touched in a way or even some other. Among the industries in which it was clearly obvious will be the farming and food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was apparent to a lot of folks that there was a huge effect at the end of this chain (e.g., hoarding in food markets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors in the source chain for which the impact is much less clear. It’s therefore important to figure out how properly the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences 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 within retail up, that is found food service down It is evident and well known that demand in the foodservice stations went down on account of the closure of places, amongst others. In some cases, sales for suppliers of the food service business thus fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % higher than before the problems began.
Products that had to come via abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic was required for use in consumer packaging. As more of this product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a big impact on production activities. In certain cases, this even meant the full stop of production (e.g. in the duck farming industry, which arrived to a standstill due to 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), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the issues, and high expenses for container transport as a result. Truck transport experienced different problems. Initially, there were uncertainties about how transport will be handled for borders, which in the long run were not as stringent as feared. The thing that was problematic in situations that are most , nonetheless, was the availability of motorists.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key components of supply chain resilience:
To us this framework for the evaluation of the interviews, the findings indicate that few organizations were well prepared for the corona problems and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This seems especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the potential to accomplish that.
Second, it was observed that more attention was required on spreading threat as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in cases where demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to increase market shares in which competitors miss options. This particular challenge isn’t new, however, it has in addition been underexposed in this problems and was often not part of preparatory activities.
Fourthly, the corona crisis shows us that the financial result of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is typically unclear how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are actually 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 traditional considerations between generation and logistics on the one hand and advertising on the other, the potential future will have to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?