Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been compromised and all industries have been touched in one of the ways or even some other. One of the industries in which this was clearly visible will be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced 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 a lot of folks that there was a great effect at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for that the impact is less clear. It is therefore important to figure out how properly the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It’s evident and well known that need in the foodservice stations went down on account of the closure of joints, amongst others. In a few cases, sales for vendors in the food service business thus fell to about twenty % of the original volume. As a complication, demand in the retail stations went up and remained within a level of about 10-20 % higher than before the problems started.
Products which had to come via abroad had the own issues of theirs. With the change in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was required for wearing in customer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a major affect on production activities. In a few instances, this even meant a full stop of production (e.g. within the duck farming business, which arrived to a standstill due to demand fall out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited during the first weeks of the issues, and expenses that are high for container transport as a result. Truck transport experienced various problems. Initially, there were uncertainties about how transport will be handled for borders, which in the long run were not as rigid as feared. That which was problematic in most cases, nevertheless, was the availability of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the key things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the conclusions indicate that few businesses had been well prepared for the corona crisis and in fact mainly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This looks particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often do not have the capability to do it.
Second, it was found that much more interest was needed on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning far more attention should be made available to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases where need cannot be met. Explicit prioritization is required to continue to meet market expectations but in addition to increase market shares wherein competitors miss options. This particular task is not new, however, it’s in addition been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s usually unclear exactly how extra expenses (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and production on the one hand as well as marketing on the other, the long term will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?