Supply chain – The COVID-19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been affected and all industries have been completely touched inside a way or even yet another. One of the industries in which it was clearly visible will be the agriculture and food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to a lot of folks that there was a great effect at the tail end of this chain (e.g., hoarding around supermarkets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for that the effect is much less clear. It’s thus imperative that you figure out how well the food supply chain as being a whole is armed to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand in retail up, in food service down It’s evident and well known that demand in the foodservice stations went down due to the closure of joints, amongst others. In a few instances, sales for vendors in the food service industry therefore fell to aproximatelly 20 % of the first volume. As a complication, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the problems started.
Products which had to come through abroad had their own problems. With the shift in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was required for wearing in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a major affect on output activities. In a few cases, this even meant a full stop in output (e.g. in the duck farming industry, which came to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability which is limited during the earliest weeks of the issues, and costs which are high for container transport as a direct result. Truck transportation encountered various problems. At first, there were uncertainties regarding how transport will be managed at borders, which in the long run weren’t as strict as feared. The thing that was problematic in cases that are many , however, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key components of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the results show that not many companies were well prepared for the corona problems and actually mostly applied responsive methods. The most important supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to design the supply chain for agility as well as versatility. This appears particularly challenging for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capacity to do so.
Second, it was discovered that more attention was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, meaning far more attention has to be given to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in situations in which need cannot be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to boost market shares wherein competitors miss options. This particular challenge is not new, although it’s in addition been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic effect of a crisis in addition depends on the way cooperation in the chain is set up. It is usually unclear precisely how further costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the basic discussions between production and logistics on the one hand and advertising and marketing on the other, the future must tell.
How is the Dutch meal supply chain coping during the corona crisis?