Supply chain – The COVID 19 pandemic has certainly had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries are touched within one way or perhaps another. One of the industries in which this was clearly obvious will be the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 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 of the food chain have major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many men and women that there was a huge impact at the conclusion of this chain (e.g., hoarding around supermarkets, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the source chain for that will the impact is less clear. It is therefore imperative that you figure out how effectively the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, found food service down It’s apparent and widely known that need in the foodservice stations went down on account of the closure of joints, amongst others. In a few instances, sales for vendors in the food service business thus fell to aproximatelly twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis began.
Products which had to come through abroad had their very own issues. With the change in need coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic was needed for use in consumer packaging. As much more of this packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had an important effect on output activities. In some cases, this even meant a full stop of output (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability which is restricted during the earliest weeks of the issues, and high costs for container transport as a direct result. Truck transportation encountered different problems. Initially, there were uncertainties on how transport would be managed at borders, which in the long run weren’t as rigid as feared. What was problematic in many situations, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this key elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the results show that not many organizations were well prepared for the corona crisis and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for agility as well as versatility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the potential to accomplish that.
Next, it was discovered that much more interest was required on spreading threat and aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be given to the way organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases in which need can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to increase market shares wherein competitors miss opportunities. This challenge is not new, but it’s also been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It’s often unclear how further costs (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally change the classic considerations between production and logistics on the one hand as well as marketing and advertising on the other hand, the future will have to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?