Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been completely touched within one way or another. One of the industries in which it was clearly noticeable will be the agriculture as well as food business.
In 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on 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 same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to most men and women that there was a huge impact at the tail end of the chain (e.g., hoarding doing food markets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors in the source chain for that will the effect is much less clear. It’s therefore important to find out how effectively the food supply chain as being a whole is actually 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, studied the influences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Need within retail up, that is found food service down It is evident and well known that need in the foodservice channels went down as a result of the closure of joints, amongst others. In some cases, sales for vendors of the food service business thus fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the retail channels went up and remained within a quality of aproximatelly 10 20 % higher than before the problems began.
Goods that had to come via abroad had their very own issues. With the shift in need from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic material was necessary for use in customer packaging. As more of this packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a big impact on production activities. In certain instances, this even meant a complete stop in production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport capacity throughout the first weeks of the issues, and high costs for container transport as a result. Truck transportation experienced various issues. To begin with, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as rigid as feared. That which was problematic in situations which are many, nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key components of supply chain resilience:
To us this framework for the analysis of the interview, the results show that not many organizations had been well prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to design the supply chain for flexibility as well as agility. This appears particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was discovered that much more interest was necessary on spreading threat as well as aiming for risk reduction within 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 required for explicit prioritization as well as clever rationing strategies in cases where need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to boost market shares in which competitors miss opportunities. This particular task is not new, however, it has also been underexposed in this specific problems and was often not part of preparatory activities.
Fourthly, the corona problems shows us that the financial impact of a crisis also is determined by the manner in which cooperation in the chain is set up. It is usually unclear how additional costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand as well as advertising on the other, the future will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?