Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries have been completely touched inside one of the ways or another. One of the industries in which it was clearly apparent will be the agriculture and food industry.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to a lot of individuals that there was a big impact at the tail end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for which the effect is much less clear. It’s thus vital that you find out how effectively the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Need in retail up, contained food service down It is obvious and widely known that need in the foodservice channels went down as a result of the closure of places, amongst others. In certain instances, sales for suppliers in the food service business as a result fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the list channels went up and remained within a quality of aproximatelly 10 20 % greater than before the crisis started.
Goods that had to come via abroad had the own problems of theirs. With the change in demand from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic was necessary for use in customer packaging. As much more of this packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had an important affect on production activities. In certain cases, this even meant a complete stop in output (e.g. inside the duck farming industry, which came 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 meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and expenses that are high for container transport as a direct result. Truck travel encountered various issues. To begin with, there were uncertainties about how transport would be handled for borders, which in the end were not as strict as feared. That which was problematic in instances that are a large number of , nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this main things of supply chain resilience:
Using this particular framework for the assessment of the interview, the results indicate that few companies had been well prepared for the corona crisis and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do so.
Next, it was observed that more interest was required on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, what this means is far more attention has to be provided to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in cases where demand can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to improve market shares in which competitors miss opportunities. This particular challenge is not new, although it has in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis also relies on the way cooperation in the chain is actually set up. It’s typically unclear exactly how extra costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally change the classic considerations between production and logistics on the one hand and marketing on the other, the long term will need to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?