Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been compromised and all industries are touched inside one of the ways or even yet another. Among the industries in which this was clearly visible is the farming as well as food business.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was apparent to majority of men and women that there was a great impact at the conclusion of this chain (e.g., hoarding around food markets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors in the supply chain for which the effect is less clear. It is thus imperative that you find out how effectively the food supply chain as a whole is actually armed to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supply 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 popular that need in the foodservice channels went down due to the closure of places, amongst others. In certain instances, sales for suppliers in the food service business therefore fell to about twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained at a level of aproximatelly 10 20 % higher than before the problems started.
Goods that had to come through abroad had their very own problems. With the change in need coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup and plastic was necessary for use in customer packaging. As more of this product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In certain cases, this even meant a complete stop of production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the problems, and costs that are high for container transport as a result. Truck transport faced various problems. At first, there were uncertainties about how transport will be managed for borders, which in the long run were not as rigid as feared. The thing that was problematic in situations which are many, however, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the analysis of the interview, the conclusions indicate that not many companies had been nicely prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
For starters, the need to create the supply chain for flexibility as well as agility. This looks especially complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to accomplish that.
Second, it was found that more attention was necessary on spreading danger and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be given to the way companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing techniques in cases in which demand cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but also to improve market shares where competitors miss options. This particular challenge isn’t new, although it’s also been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona problems teaches us that the monetary impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s usually unclear exactly how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally replace the basic considerations between production and logistics on the one hand and marketing on the other hand, the future will need to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?