Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or perhaps another. Among the industries in which this was clearly visible is the agriculture and food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its 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 effects for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to majority of men and women that there was a significant effect at the end of this chain (e.g., hoarding around food markets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors within the source chain for that will the effect is much less clear. It is therefore imperative that you determine how effectively the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, in food service down It is apparent and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In a few instances, sales for suppliers of the food service industry thus fell to aproximatelly twenty % of the original volume. As a complication, demand in the retail channels went up and remained at a quality of aproximatelly 10-20 % higher than before the crisis began.
Products which had to come through abroad had their own problems. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic material was required for use in consumer packaging. As much more of this product packaging material concluded up in consumers’ homes as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had an important affect on output activities. In some instances, this even meant the full stop in output (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other cases, 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 caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity throughout the very first weeks of the issues, and costs that are high for container transport as a result. Truck transport experienced different problems. At first, there were uncertainties about how transport would be managed at borders, which in the long run weren’t as rigid as feared. What was problematic in a large number of cases, however, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this primary components of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings indicate that few organizations were well prepared for the corona crisis and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to create the supply chain for agility and flexibility. This looks particularly challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to accomplish that.
Next, it was discovered that more attention was required on spreading threat and aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the way companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations where demand can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to boost market shares in which competitors miss options. This particular task is not new, though it’s also been underexposed in this crisis and was often not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is typically unclear how additional costs (and benefits) are sent out in a chain, if 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 have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as advertising and marketing on the other, the future will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?