Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its impact on the world. Economic indicators and health have been affected and all industries have been completely touched in a way or some other. One of the industries in which it was clearly visible would be the agriculture as well as food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was apparent to many people that there was a big effect at the conclusion of this chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning 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 much less clear. It’s therefore vital that you find out how well the food supply chain as a whole is equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand in retail up, in food service down It is obvious and popular that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for suppliers of the food service business thus fell to about 20 % of the original volume. As a side effect, demand in the list stations went up and remained within a level of aproximatelly 10-20 % greater than before the problems began.
Products that had to come through abroad had the own issues of theirs. With the change in need from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic material was needed for wearing in buyer packaging. As much more of this particular product packaging material ended up in consumers’ homes rather than in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a big impact on production activities. In some cases, this even meant the full stop of production (e.g. within the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in restricted transport capability during the very first weeks of the crisis, and costs which are high for container transport as a direct result. Truck transportation faced various problems. Initially, there were uncertainties on how transport will be handled at borders, which in the end were not as stringent as feared. The thing that was problematic in instances which are most, nevertheless, was the availability 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 the key components of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions indicate that not many organizations were well prepared for the corona crisis and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to do so.
Second, it was found that much more attention was necessary on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, meaning far more attention has to be made available to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing strategies in cases where need can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to boost market shares wherein competitors miss opportunities. This particular challenge is not new, but it’s also been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary impact of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how additional costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the classic considerations between logistics and creation on the one hand and marketing on the other, the future will need to tell.
How is the Dutch meal supply chain coping during the corona crisis?