Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been affected and all industries have been touched inside one way or perhaps another. One of the industries in which it was clearly visible is the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to many individuals that there was a big impact at the end of the chain (e.g., hoarding in grocery stores, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for which the impact is less clear. It is thus imperative that you figure out how well the food supply chain as a whole is actually equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and coming 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 around 30 Dutch supply chain actors.
Demand within retail up, contained food service down It is evident and widely known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the original volume. As a complication, demand in the list stations went up and remained within a quality of about 10-20 % higher than before the crisis began.
Products which had to come via abroad had the own issues of theirs. With the shift in need from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was needed for use in customer packaging. As much more of this packaging material ended up in consumers’ houses instead of in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a significant effect on output activities. In a few instances, this even meant a complete stop in production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport capability throughout the earliest weeks of the issues, and high expenses for container transport as a result. Truck transport encountered different issues. Initially, there were uncertainties regarding how transport will be handled at borders, which in the long run were not as rigid as feared. The thing that was problematic in cases that are a large number of , nonetheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that not many companies had been nicely prepared for the corona problems and actually mostly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to design the supply chain for agility as well as flexibility. This looks particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capacity to do so.
Next, it was found that much more interest was required on spreading danger as well as aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to increase market shares in which competitors miss options. This particular task isn’t new, however, it has also been underexposed in this crisis and was often not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is often unclear precisely how extra expenses (and benefits) are actually sent out 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 advertising activities need to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the basic considerations between generation and logistics on the one hand and marketing and advertising on the other, the potential future will need to tell.
How’s the Dutch food supply chain coping during the corona crisis?