Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been compromised and all industries have been touched inside one of the ways or perhaps some other. One of the industries in which this was clearly obvious will be the agriculture and food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 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 of the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to numerous people that there was a great effect at the conclusion of this chain (e.g., hoarding around supermarkets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the supply chain for which the impact is much less clear. It’s therefore vital that you figure out how well the food supply chain as a whole is equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, found food service down It’s evident and well known that need 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 industry as a result fell to aproximatelly 20 % of the initial volume. Being an adverse reaction, demand in the list stations went up and remained at a level of about 10 20 % higher than before the problems began.
Products that had to come through abroad had their very own issues. With the change in desire from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was needed for wearing in consumer packaging. As more of this particular product packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a major effect on production activities. In some cases, this even meant a total stop of production (e.g. in the duck farming business, which arrived to a standstill due to demand fall-out in the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in limited transport capability throughout the first weeks of the issues, and expenses which are high for container transport as a direct result. Truck transportation experienced different problems. To begin with, there were uncertainties about how transport will be handled for borders, which in the long run weren’t as stringent as feared. What was problematic in situations which are many, nevertheless, was the availability of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the core things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the results show that few businesses had been nicely prepared for the corona crisis and actually mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capacity to do so.
Next, it was observed that much more interest was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning more attention should be made available to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations where demand can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss opportunities. This particular challenge is not new, but it’s also been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona crisis teaches us that the economic impact of a crisis additionally is determined by the way cooperation in the chain is actually set up. It is typically unclear exactly how extra costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and creation on the one hand and advertising and marketing on the other, the potential future must explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?