Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been completely touched inside one of the ways or another. One of the industries in which this was clearly noticeable will be the farming as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was clear to a lot of people that there was a huge effect at the conclusion of this chain (e.g., hoarding in grocery stores, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for which the effect is much less clear. It is therefore important to figure out how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, in food service down It’s obvious and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In some cases, sales for vendors in the food service business as a result fell to about twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % higher than before the problems started.
Products that had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic material was needed for use in buyer packaging. As more of this product packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a major impact on production activities. In a few cases, this even meant a total stop in output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capability that is limited throughout the first weeks of the issues, and costs that are high for container transport as a direct result. Truck transport encountered different issues. At first, there were uncertainties about how transport will be managed at borders, which in the long run were not as rigid as feared. The thing that was problematic in instances that are most , however, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key things of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions indicate that not many companies had been well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to create the supply chain for agility and versatility. This appears particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capability to accomplish that.
Second, it was discovered that more attention was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be given to the way companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but in addition to improve market shares wherein competitors miss opportunities. This particular challenge is not new, although it has also been underexposed in this specific problems and was usually not a part of preparatory activities.
Fourthly, the corona problems teaches us that the economic effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s often unclear precisely how additional expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the classic discussions between creation and logistics on the one hand as well as marketing and advertising on the other, the potential future will need to tell.
How is the Dutch meal supply chain coping during the corona crisis?