Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been compromised and all industries have been touched inside one way or perhaps yet another. Among the industries in which this was clearly obvious will be the farming and food business.
In 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 industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to a lot of people that there was a significant effect at the end of the chain (e.g., hoarding around grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for that the impact is much less clear. It is thus vital that you determine how properly the food supply chain as a whole is prepared to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Need in retail up, contained food service down It is obvious and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In some instances, sales for vendors of the food service industry as a result fell to about twenty % of the initial volume. Being a side effect, demand in the list stations went up and remained within a degree of about 10-20 % greater than before the problems began.
Products which had to come from abroad had their very own problems. With the change in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was required for wearing in consumer packaging. As more of this product packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a significant effect on output activities. In a few instances, this even meant the full stop in production (e.g. inside the duck farming business, which arrived to a standstill due to demand fall out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity that is restricted throughout the first weeks of the crisis, and high costs for container transport as a result. Truck travel experienced various issues. To begin with, there were uncertainties about how transport will be handled at borders, which in the end weren’t as rigid as feared. What was problematic in instances which are most, however, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the main components of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions show that few organizations had been nicely prepared for the corona crisis and actually mainly applied responsive methods. The most important supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to create the supply chain for agility as well as versatility. This looks especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to accomplish that.
Second, it was discovered that much more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be given to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is needed to continue to meet market expectations but also to increase market shares in which competitors miss opportunities. This challenge is not new, but it has also been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona crisis shows you us that the economic effect of a crisis in addition relies on the way cooperation in the chain is set up. It is often unclear how further expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand and marketing on the other, the future must tell.
How’s the Dutch foods supply chain coping during the corona crisis?