Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the world. health and Economic indicators have been affected and all industries are touched in one of the ways or even yet another. One of the industries in which this was clearly obvious would be the farming and food business.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was clear to many people that there was a huge impact at the end of the chain (e.g., hoarding in supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors in the supply chain for that will the impact is less clear. It is therefore important to find out how effectively the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Demand within retail up, in food service down It is apparent and popular that need in the foodservice stations went down due to the closure of places, amongst others. In certain instances, sales for suppliers in the food service industry as a result fell to about 20 % of the original volume. As an adverse reaction, demand in the retail stations went up and remained at a quality of about 10 20 % higher than before the crisis began.
Goods that had to come from abroad had the own problems of theirs. With the change in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was required for use in consumer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a big effect on output activities. In a few instances, this even meant the full stop of output (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a significant section 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 sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability that is limited throughout the first weeks of the problems, and costs that are high for container transport as a result. Truck travel experienced various problems. Initially, there were uncertainties on how transport will be handled at borders, which in the end weren’t as strict as feared. That which was problematic in cases which are most, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The source 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 framework for the analysis of the interview, the results show that not many companies were well prepared for the corona problems and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for agility and versatility. This looks especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was observed that much more interest was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, what this means is more attention has to be given to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in situations in which need can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to improve market shares in which competitors miss options. This challenge is not new, but it’s in addition been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona issues shows you us that the economic impact of a crisis also is determined by the way cooperation in the chain is actually set up. It’s often unclear how additional expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the basic discussions between production and logistics on the one hand as well as marketing and advertising on the other, the potential future will have to explain to.
How is the Dutch meal supply chain coping during the corona crisis?