Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been touched inside one way or another. Among the industries in which it was clearly apparent would be the agriculture as well as food business.
In 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 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 consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to most people that there was a huge effect at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the source chain for that the effect is much less clear. It’s therefore important to figure out how well the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need within retail up, that is found food service down It’s obvious and widely known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In some instances, sales for suppliers of the food service business as a result fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the list stations went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis started.
Goods that had to come through abroad had their own issues. With the change in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass or plastic was required for use in buyer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had an important affect on output activities. In a few instances, this even meant a total stop in output (e.g. in the duck farming industry, which emerged to a standstill due to demand fall out in the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity which is limited during the first weeks of the issues, and high expenses for container transport as a direct result. Truck transportation experienced different issues. At first, there were uncertainties regarding how transport will be managed at borders, which in the end were not as rigid as feared. That which was problematic in many situations, nevertheless, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the key elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the findings indicate that few companies were nicely prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility as well as flexibility. This appears especially complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Second, it was observed that much more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be made available to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations in which need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but also to boost market shares in which competitors miss opportunities. This particular challenge isn’t new, though it has additionally been underexposed in this specific crisis and was usually not a part of preparatory activities.
Fourthly, the corona issues shows you us that the monetary effect of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is usually unclear precisely how additional expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as advertising and marketing on the other, the long term will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?