Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. health and Economic indicators have been compromised and all industries have been touched within a way or some other. Among the industries in which this was clearly visible is the agriculture and food business.
Throughout 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to many people that there was a big impact at the end of the chain (e.g., hoarding doing supermarkets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the source chain for which the effect is less clear. It’s thus imperative that you find out how well the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as 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 around 30 Dutch supply chain actors.
Demand within retail up, in food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the original volume. Being a side effect, demand in the list stations went up and remained within a quality of about 10-20 % higher than before the crisis began.
Products that had to come from abroad had their 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 needed for use in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a significant impact on output activities. In a few cases, this even meant a total stop in production (e.g. inside the duck farming business, which came to a standstill on account of demand fall-out in the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is restricted during the very first weeks of the crisis, and costs that are high for container transport as a result. Truck transportation encountered various issues. To begin with, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as strict as feared. The thing that was problematic in most cases, nevertheless, was the availability of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary things of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the findings show that not many companies were nicely prepared for the corona problems and in reality mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to create the supply chain for agility and versatility. This seems especially complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capability to do so.
Next, it was observed that much more interest was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, this means more attention should be made available to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in cases where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to increase market shares wherein competitors miss opportunities. This task is not new, although it has in addition been underexposed in this problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic impact of a crisis also is determined by the way cooperation in the chain is set up. It is usually unclear exactly how additional costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the classic discussions between creation and logistics on the one hand as well as marketing and advertising on the other hand, the potential future must explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?