Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been completely touched in a way or perhaps another. Among the industries in which it was clearly apparent is the agriculture as well as food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was clear to a lot of people that there was a great impact at the conclusion of the chain (e.g., hoarding around food markets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that will the impact is much less clear. It’s thus imperative that you figure out how effectively the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Need in retail up, in food service down It’s obvious and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In a few cases, sales for suppliers in the food service industry as a result fell to about twenty % of the original volume. Being a complication, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % greater than before the problems began.
Products which had to come through abroad had their very own issues. With the change in desire coming from foodservice to retail, the need for packaging changed dramatically, More tin, cup and plastic was needed for use in buyer packaging. As more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important impact on output activities. In certain instances, this even meant a complete stop of production (e.g. in the duck farming industry, which emerged to a standstill due to demand fall out inside the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities 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 capacity that is restricted throughout the very first weeks of the issues, and costs which are high for container transport as a consequence. Truck travel encountered different issues. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as rigid as feared. That which was problematic in most instances, nonetheless, was the availability of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this core components of supply chain resilience:
To us this framework for the evaluation of the interview, the findings show that few organizations were well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to develop the supply chain for agility and versatility. This seems particularly complicated for smaller sized companies: building resilience right 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 found that much more interest was needed on spreading danger and also aiming for risk reduction inside the supply chain. For the future, meaning far more attention ought to be provided to the way organizations count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases where demand can’t be met. Explicit prioritization is necessary to continue to meet market expectations but also to increase market shares where competitors miss options. This task is not new, however, it’s also been underexposed in this specific crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the monetary impact of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It is typically unclear precisely 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 actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally change the traditional considerations between generation and logistics on the one hand as well as marketing on the other, the future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?