Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been touched within a way or even another. Among the industries in which it was clearly visible is the farming as well as food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are impacted. Though it was apparent to numerous individuals that there was a significant impact at the conclusion of the chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that the impact is less clear. It’s thus imperative that you figure out how well the food supply chain as being a whole is equipped to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and out of 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 analysis of theirs on interviews with about 30 Dutch source chain actors.
Demand 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 cases, sales for suppliers in the food service industry therefore fell to about twenty % of the original volume. Being a side effect, demand in the retail channels went up and remained at a level of about 10-20 % higher than before the crisis started.
Products which had to come via abroad had the own issues of theirs. With the change in need coming from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic material was necessary for wearing in consumer packaging. As more of this particular product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant impact on output activities. In certain instances, this even meant a total stop of production (e.g. within the duck farming business, which emerged to a standstill due to demand fall out inside the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities 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 electrical capacity which is restricted throughout the first weeks of the problems, and high expenses for container transport as a result. Truck transport experienced various issues. To begin with, there were uncertainties regarding how transport will be managed at borders, which in the end were not as strict as feared. The thing that was problematic in many cases, however, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the results indicate that few companies were nicely prepared for the corona problems and in fact mostly applied responsive practices. The most important source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
For starters, the need to design the supply chain for agility as well as versatility. This looks especially complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capability to do so.
Next, it was discovered that more attention was needed on spreading threat and aiming for risk reduction in the supply chain. For the future, meaning more attention has to be made available to the way businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in situations where demand cannot be met. Explicit prioritization is actually required to keep on to satisfy market expectations but also to boost market shares wherein competitors miss options. This particular task isn’t new, however, it’s also been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona crisis shows us that the financial result of a crisis additionally is determined by the way cooperation in the chain is actually set up. It is often unclear how extra costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the classic discussions between logistics and generation on the one hand and marketing and advertising on the other hand, the potential future will need to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?