Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been completely touched inside one of the ways or yet another. One of the industries in which it was clearly obvious would be the agriculture as well as food business.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry 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 in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are affected. Even though it was apparent to numerous individuals that there was a huge impact at the tail end of this chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the supply chain for which the impact is much less clear. It is therefore important to find out how properly the food supply chain as being a whole is actually armed to contend with disruptions. Researchers in 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 throughout the food supply chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Demand within retail up, that is found food service down It’s evident and well known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In certain cases, sales for vendors of the food service business as a result fell to about twenty % of the original volume. Being a complication, demand in the list stations went up and remained at a level of aproximatelly 10 20 % higher than before the problems started.
Products that had to come from abroad had the own issues of theirs. With the shift in need from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic material was required for use in customer packaging. As more of this product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had an important impact on output activities. In certain cases, this even meant the full stop of production (e.g. within the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability that is restricted during the first weeks of the issues, and costs that are high for container transport as a consequence. Truck transport experienced various problems. At first, there were uncertainties on how transport will be handled for borders, which in the end weren’t as stringent as feared. The thing that was problematic in situations that are many , nonetheless, was the availability of drivers.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the main elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the conclusions indicate that few businesses were nicely prepared for the corona crisis and in reality mostly applied responsive practices. The most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Next, it was discovered that much more interest was needed on spreading threat and aiming for risk reduction inside the supply chain. For the future, what this means is more attention ought to be made available to the way businesses count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in situations where demand cannot be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to increase market shares where competitors miss opportunities. This task is not new, however, it’s also been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial result of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is usually unclear exactly how additional costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand and advertising and marketing on the other, the potential future must explain to.
How is the Dutch foods supply chain coping during the corona crisis?