Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been affected and all industries have been touched in a way or even another. One of the industries in which it was clearly apparent will be the farming as well as food industry.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to numerous individuals that there was a huge effect at the end of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the supply chain for that will the impact is much less clear. It’s therefore vital that you find out how effectively the food supply chain as a whole is actually equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Need within retail up, found food service down It is obvious and popular that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to about twenty % of the original volume. As a side effect, demand in the retail channels went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis began.
Products that had to come from abroad had the own issues of theirs. With the change in need coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was required for use in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a significant effect on production activities. In a few instances, this even meant a total stop of output (e.g. in the duck farming industry, which came to a standstill due to demand fall-out in the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted during the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport encountered different problems. At first, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as strict as feared. What was problematic in cases that are many , however, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key components of supply chain resilience:
To us this particular framework for the analysis of the interview, the results indicate that few businesses were nicely prepared for the corona problems and actually mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the potential to accomplish that.
Next, it was found that much more interest was needed on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means more attention should be made available to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in situations in which need can’t be met. Explicit prioritization is required to continue to satisfy market expectations but also to boost market shares wherein competitors miss opportunities. This challenge is not new, but it has additionally been underexposed in this specific problems and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is often unclear exactly how further 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 features are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic discussions between logistics and creation on the one hand as well as marketing and advertising on the other, the potential future will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?