Supply chain - The COVID-19 pandemic has certainly had its impact impact on the world. Economic indicators and health have been affected and all industries have been completely touched inside a way or perhaps yet another. One of the industries in which it was clearly visible is the farming as well as food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was apparent to numerous men and women that there was a great effect at the end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for that will the effect is less clear. It is therefore vital that you find out how effectively the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand within retail up, contained food service down It is obvious and popular that demand in the foodservice channels went down due to 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 list stations went up and remained within a level of aproximatelly 10-20 % greater than before the crisis started.
Goods that had to come from abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass or plastic material was required for wearing in customer packaging. As much more of this packaging material ended up in consumers' homes instead of in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had a significant affect on production activities. In a few instances, this even meant the full stop of output (e.g. within the duck farming industry, which arrived to a standstill due to demand fall out inside the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain - Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capability throughout the first weeks of the issues, and costs which are high for container transport as a direct result. Truck transport experienced various problems. Initially, there were uncertainties regarding how transport will be managed for borders, which in the long run were not as rigid as feared. That which was problematic in a large number of instances, nonetheless, was the availability of drivers.
The reaction to COVID 19 - supply chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of this primary elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the conclusions indicate that not many organizations were nicely prepared for the corona crisis and in fact mostly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to design the supply chain for versatility as well as agility. This seems particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don't have the capability to do it.
Second, it was found that more attention was required on spreading danger and aiming for risk reduction inside the supply chain. For the future, this means far more attention has to be made available to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations where demand can't be met. Explicit prioritization is necessary to continue to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This challenge is not new, however, it's additionally been underexposed in this specific crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary effect of a crisis in addition is determined by the way cooperation in the chain is actually set up. It's often unclear exactly how additional costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain functions are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the basic discussions between logistics and creation on the one hand and marketing on the other, the potential future will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?