Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been affected and all industries have been completely touched within a way or perhaps some other. Among the industries in which this was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Despite the fact that it was clear to most people that there was a huge effect at the tail end of this chain (e.g., hoarding around food markets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the source chain for that will the effect is less clear. It is thus imperative that you determine how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s apparent and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service industry thus fell to aproximatelly twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % greater than before the crisis began.
Goods that had to come via abroad had their own issues. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic material was necessary for use in customer packaging. As much more of this particular packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in desire have had an important effect on production activities. In certain instances, this even meant the full stop of output (e.g. in the duck farming business, which came to a standstill as a result of demand fall out on the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in restricted transport electrical capacity during the earliest weeks of the crisis, and costs that are high for container transport as a consequence. Truck transport experienced various problems. To begin with, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as stringent as feared. That which was problematic in cases which are a large number of, nonetheless, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the core elements of supply chain resilience:
To us this particular framework for the assessment of the interview, the conclusions indicate that not many organizations had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to do it.
Second, it was discovered that much more interest was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, meaning more attention ought to be provided to the way organizations count 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 necessary to continue to meet market expectations but in addition to improve market shares where competitors miss opportunities. This challenge is not new, though it’s in addition been underexposed in this crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary result of a crisis also depends on the manner in which cooperation in the chain is set up. It’s typically unclear exactly how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally change the classic discussions between creation and logistics on the one hand and advertising and marketing on the other hand, the potential future will need to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?