Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the planet. health and Economic indicators have been compromised and all industries have been completely touched inside a way or another. Among the industries in which it was clearly visible would be the agriculture as well as food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to majority of people that there was a big effect at the tail end of the chain (e.g., hoarding in food markets, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for that will the effect is less clear. It’s therefore imperative that you determine how well the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Demand in 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 instances, sales for vendors of the food service business therefore fell to about 20 % of the initial volume. Being 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.
Products that had to come from abroad had their own problems. With the change in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was needed for use in customer packaging. As much more of this product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had an important affect on output activities. In some cases, this even meant the full stop in 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 instances, a significant part of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capability that is restricted during the very first weeks of the problems, and costs that are high for container transport as a result. Truck travel experienced different problems. Initially, there were uncertainties on how transport would be handled at borders, which in the long run were not as strict as feared. The thing that was problematic in situations that are many , nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main things of supply chain resilience:
Using this framework for the assessment of the interviews, the conclusions indicate that few organizations had been nicely prepared for the corona problems and in reality mostly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to do so.
Next, it was discovered that more attention was necessary on spreading threat and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be provided to the manner in which organizations count on specific countries, customers, and suppliers.
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 needed to continue to meet market expectations but additionally to increase market shares in which competitors miss opportunities. This particular challenge isn’t new, although it’s also been underexposed in this crisis and was usually not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary result of a crisis also depends on the manner in which cooperation in the chain is set up. It’s often unclear precisely how additional costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the classic considerations between creation and logistics on the one hand as well as advertising and marketing on the other, the future will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?