Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the planet. health and Economic indicators have been affected and all industries are touched inside one way or even some other. One of the industries in which it was clearly visible is the agriculture and food industry.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to many folks that there was a significant impact at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that will the effect is less clear. It is therefore important to find out how well the food supply chain as being a whole is prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Demand within retail up, found food service down It is evident and popular that demand in the foodservice channels went down on account of the closure of places, amongst others. In some cases, sales for suppliers in the food service industry as a result fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the list stations went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis started.
Products which had to come via abroad had their very own issues. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was required for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a significant affect on output activities. In a few cases, this even meant the full stop of production (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning 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 throughout the very first weeks of the problems, and expenses that are high for container transport as a direct result. Truck transport encountered various issues. To begin with, there were uncertainties about how transport would be managed at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations which are a large number of, however, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this main elements of supply chain resilience:
Using this framework for the assessment of the interviews, the findings show that not many businesses had been nicely prepared for the corona problems and in reality mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to create the supply chain for flexibility and agility. This looks especially complicated for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Second, it was discovered that much more attention was required on spreading threat and aiming for risk reduction inside the supply chain. For the future, this means more attention should be made available to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which need cannot be met. Explicit prioritization is needed to keep on to meet market expectations but additionally to increase market shares where competitors miss options. This particular task is not new, though it’s additionally been underexposed in this specific crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial effect of a crisis also relies on the way cooperation in the chain is actually set up. It’s often unclear precisely how further expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the basic considerations between production and logistics on the one hand and advertising and marketing on the other, the future must tell.
How’s the Dutch food supply chain coping during the corona crisis?