Supply chain – The COVID 19 pandemic has certainly had its impact effect on the world. health and Economic indicators have been affected and all industries have been completely touched in a way or even some other. Among the industries in which this was clearly apparent would be the farming and food business.
Throughout 2019, the Dutch farming as well as food industry 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 within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to many folks that there was a huge impact at the tail end of the chain (e.g., hoarding around supermarkets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that will the impact is much less clear. It’s therefore vital that you find out how well the food supply chain as a whole is actually prepared 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 influences of the COVID 19 pandemic all over the food resources chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Need within retail up, contained food service down It is evident and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to about 20 % of the first volume. As a complication, demand in the list stations went up and remained within a quality of about 10-20 % greater than before the problems began.
Products that had to come through abroad had their own issues. With the shift in need from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was necessary for wearing in consumer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important impact on production activities. In a few instances, this even meant a full stop of production (e.g. within the duck farming business, which came to a standstill on account of demand fall out in the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in limited transport capability throughout the first weeks of the issues, and costs which are high for container transport as a result. Truck travel experienced different issues. Initially, there were uncertainties on how transport will be managed at borders, which in the end were not as stringent as feared. What was problematic in situations which are many, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this main things of supply chain resilience:
Using this framework for the assessment of the interviews, the conclusions indicate that few companies were well prepared for the corona crisis and in reality mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This looks particularly challenging for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the potential to do it.
Second, it was observed that much more interest was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, this means far more attention should be given to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to improve market shares where competitors miss options. This challenge is not new, however, it has in addition been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona problems shows us that the monetary result of a crisis also relies on the manner in which cooperation in the chain is set up. It’s usually unclear precisely how further costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as advertising and marketing on the other hand, the long term will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?