Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been affected and all industries are touched within one of the ways or yet another. Among the industries in which it was clearly noticeable is the agriculture and food business.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting 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 major effects for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was apparent to many folks that there was a big effect at the conclusion of this chain (e.g., hoarding in grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for that the impact is less clear. It is thus imperative that you figure out how well the food supply chain as a whole is armed to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, in food service down It is obvious and widely known that demand in the foodservice channels went down due to the closure of joints, amongst others. In some cases, sales for vendors of the food service industry as a result fell to about 20 % of the initial volume. Being an adverse reaction, demand in the retail channels went up and remained at a degree of about 10-20 % higher than before the problems began.
Goods that had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic was required for use in consumer packaging. As more of this particular packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a major impact on production activities. In some instances, this even meant a complete stop of production (e.g. within the duck farming business, which came to a standstill due to demand fall out inside the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted during the very first weeks of the issues, and expenses which are high for container transport as a consequence. Truck transportation encountered different issues. To begin with, there were uncertainties on how transport will be managed for borders, which in the long run weren’t as strict as feared. What was problematic in a large number of situations, nonetheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key elements of supply chain resilience:
Using this framework for the assessment of the interview, the conclusions indicate that few businesses were nicely prepared for the corona problems and in fact mostly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for versatility as well as agility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do so.
Second, it was observed that more attention was required on spreading risk as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be given to the way companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to increase market shares where competitors miss options. This challenge isn’t new, but it has additionally been underexposed in this crisis and was often not part of preparatory activities.
Fourthly, the corona problems shows us that the financial effect of a crisis in addition relies on the way cooperation in the chain is actually set up. It is often unclear precisely how additional expenses (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand and advertising on the other hand, the future will need to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?