Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been touched inside a way or perhaps another. One of the industries in which it was clearly visible is the farming as well as food industry.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was apparent to a lot of individuals that there was a big impact at the end 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), there are many actors within the source chain for which the impact is much less clear. It’s therefore important to find out how well the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food resources chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is evident and well known that demand in the foodservice channels went down on account of the closure of places, amongst others. In some cases, sales for vendors of the food service industry therefore fell to aproximatelly twenty % of the original volume. As a complication, demand in the retail stations went up and remained within a quality of about 10-20 % higher than before the problems began.
Products which had to come through abroad had their very own issues. With the change in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic material was required for use in buyer packaging. As more of this particular packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a big impact on production activities. In some instances, this even meant a complete stop in output (e.g. in the duck farming business, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport electrical capacity during the first weeks of the problems, and expenses which are high for container transport as a result. Truck travel faced various problems. To begin with, there were uncertainties regarding how transport will be managed for borders, which in the long run were not as strict as feared. What was problematic in cases which are most, nevertheless, was the availability of motorists.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary things of supply chain resilience:
Using this particular framework for the analysis of the interview, the conclusions indicate that few organizations were nicely prepared for the corona crisis and in fact mostly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This seems particularly challenging for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capacity to do it.
Second, it was observed that much more interest was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations in which need cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but additionally to boost market shares where competitors miss options. This challenge isn’t new, but it has also been underexposed in this specific problems and was usually not a component of preparatory activities.
Fourthly, the corona crisis shows us that the economic effect of a crisis also relies on the way cooperation in the chain is actually set up. It is often unclear exactly how additional costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the basic considerations between production and logistics 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 during the corona crisis?