Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched inside one of the ways or even some other. Among the industries in which it was clearly visible is the farming and food industry.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was clear to a lot of men and women that there was a huge effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors within the source chain for that the impact is much less clear. It’s thus vital that you determine how well the food supply chain as being a whole is prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Need in retail up, contained food service down It’s obvious and well known that need in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for vendors of the food service business thus fell to about twenty % of the original volume. As a side effect, demand in the retail stations went up and remained within a level of about 10-20 % higher than before the problems started.
Products that had to come through abroad had their very own problems. With the shift in need coming from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic material was needed for wearing in consumer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a big impact on production activities. In certain instances, this even meant a complete stop of production (e.g. inside the duck farming industry, which came to a standstill due to demand fall-out in the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
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 capacity that is limited during the very first weeks of the problems, and costs that are high for container transport as a direct result. Truck travel encountered different issues. At first, there were uncertainties on how transport would be handled at borders, which in the end were not as strict as feared. The thing that was problematic in many cases, nonetheless, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the key components of supply chain resilience:
To us this particular framework for the assessment of the interview, the conclusions indicate that not many organizations had been well prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for flexibility as well as agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capability to do it.
Next, it was discovered that more attention was necessary on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be provided to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in situations in which need can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to increase market shares wherein competitors miss options. This particular task isn’t new, although it has in addition been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis also depends on the manner in which cooperation in the chain is actually set up. It is typically unclear exactly how additional costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally change the basic considerations between production and logistics on the one hand as well as marketing and advertising on the other, the future will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?