Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched within one of the ways or yet another. Among the industries in which this was clearly apparent is the farming as well as food industry.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was apparent to a lot of people that there was a significant effect at the conclusion of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the source chain for that will the effect is much less clear. It’s therefore important to figure out how well the food supply chain as a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It’s obvious and well known that demand 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 industry as a result fell to about 20 % of the first volume. Being a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10-20 % greater than before the crisis started.
Products which had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup or plastic material was required for use in buyer packaging. As much more of this packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important effect on output activities. In a few instances, this even meant the full stop in output (e.g. in the duck farming business, which arrived to a standstill due to demand fall out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability which is restricted during the earliest weeks of the crisis, and expenses that are high for container transport as a result. Truck transport encountered different problems. To begin with, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as rigid as feared. That which was problematic in a large number of cases, nevertheless, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
Using this framework for the analysis of the interviews, the conclusions indicate that few organizations were nicely prepared for the corona crisis and in reality mostly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to create the supply chain for agility as well as flexibility. This appears particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the capacity to do so.
Next, it was observed that more interest was required on spreading risk and aiming for risk reduction within the supply chain. For the future, this means far more attention should be provided to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in situations in which need cannot be met. Explicit prioritization is required to keep on to meet market expectations but in addition to increase market shares where competitors miss opportunities. This particular task isn’t new, though it has also been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows you us that the economic effect of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It’s usually unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally switch the basic considerations between logistics and generation on the one hand as well as marketing on the other hand, the long term will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?