Supply chain – The COVID-19 pandemic has definitely had its impact influence on the planet. Economic indicators and health have been compromised and all industries are touched within one of the ways or even another. Among the industries in which it was clearly visible will be the farming as well as food business.
Throughout 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs 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. Even though it was clear to a lot of men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding around supermarkets, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for which the impact is much less clear. It is thus important to determine how properly the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Need in retail up, that is found food service down It is obvious and widely known that demand in the foodservice channels went down due to the closure of places, amongst others. In some cases, sales for vendors in the food service industry thus fell to aproximatelly 20 % of the first volume. Being a complication, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the problems started.
Products which had to come through abroad had the own problems of theirs. With the change in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic was needed for wearing in customer packaging. As more of this particular product packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in need have had a big affect on output activities. In some cases, this even meant a total stop in output (e.g. within the duck farming business, which arrived to a standstill on account of demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity throughout the very first weeks of the issues, and high costs for container transport as a direct result. Truck transportation faced various problems. Initially, there were uncertainties regarding how transport will be managed at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in situations which are most, however, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings indicate that not many companies had been well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility as well as versatility. This looks particularly challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was observed that much more attention was required on spreading risk and aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be given to the way companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases where need can’t be met. Explicit prioritization is required to keep on to meet market expectations but also to increase market shares where competitors miss opportunities. This particular challenge is not new, though it has also been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona problems shows us that the financial result of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is often unclear how extra costs (and benefits) are sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the classic considerations between logistics and generation on the one hand and advertising and marketing on the other, the long term must explain to.
How’s the Dutch food supply chain coping during the corona crisis?