Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched in a way or yet another. Among the industries in which it was clearly visible is the agriculture and food business.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to a lot of people that there was a big impact at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors inside the supply chain for that will the effect is less clear. It’s therefore important to determine how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It is apparent and popular that demand in the foodservice channels went down due to the closure of joints, amongst others. In certain instances, sales for vendors in the food service industry thus fell to aproximatelly twenty % of the first volume. As a complication, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was necessary for wearing in buyer packaging. As more of this packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had an important effect on output activities. In a few instances, this even meant the full stop of production (e.g. in the duck farming industry, which arrived to a standstill due to demand fall-out in the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity that is limited during the earliest weeks of the problems, and expenses that are high for container transport as a result. Truck travel faced different problems. Initially, there were uncertainties about how transport will be handled at borders, which in the end were not as rigid as feared. What was problematic in situations which are many, nonetheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main components of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions indicate that not many companies were well prepared for the corona crisis and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to create the supply chain for agility as well as flexibility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the potential to do so.
Second, it was found that more attention was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in cases where demand can’t be met. Explicit prioritization is actually required to keep on to satisfy market expectations but additionally to boost market shares wherein competitors miss opportunities. This task isn’t new, although it’s in addition been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic effect of a crisis also depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how further expenses (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 characteristics are in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally change the traditional discussions between logistics and production on the one hand and marketing and advertising on the other, the potential future must explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?