Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been compromised and all industries have been completely touched within one way or perhaps some other. Among the industries in which this was clearly obvious will be the agriculture and food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade 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 effects for the Dutch economy and food security as lots of stakeholders are affected. Though it was apparent to many individuals that there was a big effect at the tail end of the chain (e.g., hoarding in grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors in the supply chain for that the effect is less clear. It is thus vital that you find out how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also from 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 about 30 Dutch supply chain actors.
Need within retail up, found food service down It’s evident and well known that need in the foodservice stations went down as a result of the closure of places, amongst others. In some instances, sales for suppliers in the food service business as a result fell to aproximatelly 20 % of the first volume. Being a complication, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % greater than before the problems started.
Products that had to come from abroad had their very own issues. With the change in desire from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic material was needed for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ houses instead of in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a big affect on output activities. In certain cases, this even meant the full stop in output (e.g. within the duck farming business, which came to a standstill on account of demand fall out inside the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits 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 electrical capacity throughout the very first weeks of the crisis, and costs that are high for container transport as a consequence. Truck travel encountered different problems. Initially, there were uncertainties on how transport will be managed for borders, which in the end weren’t as stringent as feared. The thing that was problematic in a large number of cases, nevertheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main things of supply chain resilience:
To us this particular framework for the analysis of the interview, the conclusions indicate that not many companies had been well prepared for the corona crisis and in reality mostly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to develop the supply chain for versatility and agility. This seems particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capability to do so.
Second, it was discovered that more attention was needed on spreading threat and aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be given to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in cases where demand cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to increase market shares in which competitors miss opportunities. This challenge isn’t new, however, it has also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is typically unclear how extra costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally change the basic discussions between logistics and generation on the one hand and advertising on the other, the future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?