Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been affected and all industries have been completely touched in one way or even another. One of the industries in which it was clearly apparent will be the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). Based on 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 the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to a lot of folks that there was a great effect at the conclusion of this chain (e.g., hoarding doing supermarkets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for that will the impact is less clear. It is thus vital that you find out how properly the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and 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 30 Dutch source chain actors.
Need in retail up, contained food service down It is obvious and widely known that need in the foodservice channels went down due to the closure of places, amongst others. In a few cases, sales for vendors of the food service business as a result fell to about 20 % of the first volume. As a complication, demand in the list channels went up and remained within a level of about 10 20 % higher than before the crisis started.
Products which had to come from abroad had their very own issues. With the shift in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, glass or plastic was required for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a major impact on production activities. In some instances, this even meant a total stop of production (e.g. inside the duck farming business, which emerged to a standstill due to demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity throughout the very first weeks of the problems, and expenses that are high for container transport as a result. Truck transport encountered various problems. Initially, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as stringent as feared. What was problematic in many cases, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the primary things of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions show that few companies were well prepared for the corona crisis and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for flexibility and agility. This seems especially challenging for smaller sized 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 do it.
Second, it was found that more attention was needed on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be given to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in cases where demand can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to improve market shares wherein competitors miss options. This task isn’t new, however, it has additionally been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the monetary result of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s often unclear precisely how extra 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 functionality are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally change the basic considerations between logistics and generation on the one hand as well as marketing and advertising on the other hand, the potential future will need to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?