Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. health and Economic indicators have been compromised and all industries have been touched inside a way or some other. One of the industries in which this was clearly apparent will be the agriculture and food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 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 in the food chain have big effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to majority of folks that there was a significant effect at the tail end of the chain (e.g., hoarding in food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for that the impact is much less clear. It’s thus vital that you figure out how effectively the food supply chain as being a whole is equipped to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Need within retail up, found food service down It is obvious and popular that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some instances, sales for suppliers in the food service business as a result fell to about 20 % of the first volume. As an adverse reaction, demand in the list stations went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis began.
Products which had to come via abroad had their own problems. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic was needed for wearing in buyer packaging. As much more of this product packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important effect on output activities. In a few instances, this even meant the full stop of output (e.g. inside the duck farming business, which came to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a major part 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 of China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capacity which is restricted during the earliest weeks of the problems, and costs which are high for container transport as a consequence. Truck transportation experienced different problems. Initially, there were uncertainties about how transport would be managed at borders, which in the long run were not as stringent as feared. What was problematic in cases that are a large number of , nonetheless, was the availability of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this main elements of supply chain resilience:
Using this framework for the analysis of the interviews, the conclusions show that few organizations had been well prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
To begin with, 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 time and attention in the business, and smaller organizations oftentimes do not have the potential to do so.
Second, it was observed that more interest was needed on spreading risk and aiming for risk reduction within the supply chain. For the future, what this means is more attention should be provided to the manner in which businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as clever rationing strategies in cases in which demand cannot be met. Explicit prioritization is needed to keep on to meet market expectations but additionally to improve market shares in which competitors miss opportunities. This particular task is not new, though it has in addition been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial effect of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s often unclear exactly how additional expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally change the classic discussions between generation and logistics on the one hand and advertising and marketing on the other, the future will have to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?