Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. Economic indicators and health have been affected and all industries have been touched inside one of the ways or yet another. One of the industries in which this was clearly visible is the farming as well as food industry.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to a lot of people that there was a huge impact at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors in the supply chain for which the effect is less clear. It’s therefore important to figure out how effectively the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Need within retail up, in food service down It is apparent and widely known that demand in the foodservice stations went down on account of the closure of joints, amongst others. In certain cases, sales for suppliers of the food service industry therefore fell to aproximatelly twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come via abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic material was necessary for wearing in buyer packaging. As much more of this particular product packaging material ended up in consumers’ houses instead of in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had an important affect on output activities. In a few cases, this even meant a complete stop in output (e.g. within the duck farming industry, which arrived to a standstill due to demand fall out inside the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport capacity throughout the first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transportation encountered different issues. Initially, there were uncertainties about how transport would be handled at borders, which in the long run were not as rigid as feared. That which was problematic in many instances, nevertheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this main components of supply chain resilience:
Using this particular framework for the analysis of the interviews, the results show that few companies had been nicely prepared for the corona crisis and in fact mostly applied responsive practices. The most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility and versatility. This looks particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capability to do it.
Second, it was discovered that much more interest was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be provided to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing strategies in cases where need can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to improve market shares where competitors miss options. This challenge isn’t new, though it has additionally been underexposed in this specific problems and was frequently not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary impact of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It is often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain features are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand as well as advertising on the other hand, the potential future will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?