Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been touched within one way or some other. One of the industries in which this was clearly obvious will be the farming as well as food business.
In 2019, the Dutch extension and food niche 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 the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to most men and women that there was a significant effect at the tail end of the chain (e.g., hoarding doing supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the supply chain for that the impact is much less clear. It is therefore imperative that you determine how well the food supply chain as being a whole is prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Need within retail up, contained food service down It’s apparent and widely known that need in the foodservice stations went down due to the closure of joints, amongst others. In a few instances, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the first volume. As an adverse reaction, demand in the retail stations went up and remained within a degree of aproximatelly 10 20 % greater than before the crisis began.
Goods that had to come from abroad had their own problems. With the change in demand from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was needed for wearing in customer packaging. As more of this product packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had an important affect on production activities. In some cases, this even meant a full stop in production (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall out on the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability that is limited during the first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck travel faced various problems. At first, there were uncertainties about how transport would be handled at borders, which in the end weren’t as stringent as feared. The thing that was problematic in cases which are most, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions show that few organizations had been nicely prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This seems particularly challenging for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capability to do it.
Second, it was discovered that more attention was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be given to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss opportunities. This challenge isn’t new, although it’s additionally been underexposed in this specific crisis and was usually not a component of preparatory activities.
Fourthly, the corona issues shows us that the monetary result of a crisis additionally depends on the manner in which cooperation in the chain is set up. It’s often unclear how additional expenses (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain functions are in the driving seat during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the basic considerations between creation and logistics on the one hand as well as marketing and advertising on the other, the future will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?