Supply chain – The COVID-19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been completely touched inside a way or perhaps yet another. Among the industries in which this was clearly visible would be the agriculture and food industry.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was apparent to most individuals that there was a huge effect at the tail end of the chain (e.g., hoarding in grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors inside the source chain for that will the impact is less clear. It is therefore vital that you determine how effectively the food supply chain as a whole is prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand in retail up, in food service down It’s obvious and widely known that need in the foodservice stations went down as a result of the closure of places, amongst others. In some instances, sales for vendors in the food service industry therefore fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a quality of aproximatelly 10 20 % higher than before the crisis began.
Goods that had to come via abroad had the own problems of theirs. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was required for use in consumer packaging. As more of this product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a significant affect on output activities. In certain cases, this even meant a full stop of production (e.g. inside the duck farming industry, which came to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities 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 electrical capacity that is restricted throughout the first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transport experienced various issues. At first, there were uncertainties regarding how transport would be managed at borders, which in the end weren’t as rigid as feared. That which was problematic in many instances, nevertheless, was the availability of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this primary things of supply chain resilience:
To us this framework for the evaluation of the interview, the results indicate that few businesses had been well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems especially complicated for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to accomplish that.
Next, it was found that more interest was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, meaning far more attention should be made available to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in situations where demand cannot be met. Explicit prioritization is actually required to keep on to satisfy market expectations but also to increase market shares wherein competitors miss options. This task isn’t new, although it has also been underexposed in this crisis and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial effect of a crisis in addition relies on the way cooperation in the chain is set up. It is often unclear exactly how extra costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as advertising and marketing on the other hand, the potential future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?