Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries have been touched within one way or even yet another. Among the industries in which it was clearly noticeable would be the agriculture and food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was clear to majority of people that there was a huge impact at the conclusion of the chain (e.g., hoarding around supermarkets, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for which the effect is much less clear. It is therefore important to determine how properly the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Need within retail up, contained food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In some instances, sales for suppliers of the food service industry as a result fell to aproximatelly twenty % 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 problems started.
Products which had to come via abroad had their very own issues. With the change in need coming from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic material was required for use in customer packaging. As more of this packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a big affect on production activities. In certain cases, this even meant the full stop of 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 instances, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is limited throughout the very first weeks of the problems, and costs that are high for container transport as a result. Truck transportation faced different problems. Initially, there were uncertainties on how transport would be managed at borders, which in the long run weren’t as strict as feared. That which was problematic in cases which are most, however, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the core components of supply chain resilience:
To us this particular framework for the assessment of the interview, the results show that few businesses were well prepared for the corona problems and actually mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This looks particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capability to do so.
Next, it was observed that more interest was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be given to the manner in which companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to improve market shares wherein competitors miss opportunities. This challenge isn’t new, although it’s also been underexposed in this specific problems and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the economic effect of a crisis also relies on the manner in which cooperation in the chain is set up. It is often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally replace the basic considerations between production and logistics on the one hand and marketing and advertising on the other, the potential future will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?