Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been completely touched in a way or another. One of the industries in which it was clearly noticeable will be the farming and food business.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover 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 affected. Despite the fact that it was clear to a lot of people that there was a great impact at the tail end of this chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors within the source chain for which the impact is less clear. It is thus imperative that you determine how properly the food supply chain as a whole is equipped to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It is apparent and well known that need in the foodservice stations went down on account of the closure of joints, amongst others. In some instances, sales for vendors of the food service business as a result fell to about 20 % of the first volume. Being an adverse reaction, demand in the retail channels went up and remained within a quality of about 10-20 % greater than before the problems started.
Products that had to come through abroad had the own problems of theirs. With the change in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was necessary for wearing in buyer packaging. As much more of this packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a major impact on output activities. In certain cases, this even meant a total stop of output (e.g. inside the duck farming business, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity which is restricted throughout the earliest weeks of the crisis, and expenses which are high for container transport as a result. Truck transport encountered various issues. To begin with, there were uncertainties on how transport will be handled for borders, which in the end weren’t as strict as feared. What was problematic in situations which are many, nonetheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary components of supply chain resilience:
Using this particular framework for the analysis of the interview, the results show that not many companies were nicely prepared for the corona problems and actually mostly applied responsive methods. The most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This appears particularly complicated for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the potential to do so.
Next, it was discovered that more attention was needed on spreading threat and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be provided to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations where demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but additionally to increase market shares wherein competitors miss opportunities. This challenge is not new, though it has also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona problems teaches us that the financial result of a crisis also relies on the manner in which cooperation in the chain is set up. It’s typically unclear precisely how extra costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally replace the classic discussions between production and logistics on the one hand and marketing on the other hand, the future will need to tell.
How’s the Dutch meal supply chain coping during the corona crisis?