Supply chain – The COVID 19 pandemic has certainly had its impact effect on the world. health and Economic indicators have been affected and all industries have been touched within one of the ways or another. Among the industries in which it was clearly visible will be the agriculture as well as food industry.
In 2019, the Dutch agriculture and food niche 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 in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to most individuals that there was a significant impact at the conclusion of the chain (e.g., hoarding in grocery stores, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors within the source chain for which the impact is less clear. It is therefore vital that you find out how effectively the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It is evident and popular that demand in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for vendors in the food service business as a result fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the retail stations went up and remained at a degree of about 10-20 % higher than before the problems started.
Products that had to come from abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the need for packaging changed dramatically, More tin, cup or plastic material was necessary for wearing in customer packaging. As more of this particular packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a big affect on output activities. In some instances, this even meant a full stop in output (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall out on the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited throughout the earliest weeks of the problems, and expenses that are high for container transport as a result. Truck travel faced various problems. At first, there were uncertainties on how transport will be handled at borders, which in the long run weren’t as stringent as feared. That which was problematic in situations which are most, nevertheless, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the core elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings show that few companies had been well prepared for the corona crisis and in reality mainly applied responsive practices. The most notable supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
For starters, the need to design the supply chain for agility and flexibility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the potential to do it.
Next, it was observed that much more interest was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, this means more attention ought to be provided to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in situations where need cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but also to improve market shares wherein competitors miss opportunities. This particular task isn’t new, however, it has also been underexposed in this problems and was often not a component of preparatory activities.
Fourthly, the corona issues teaches us that the financial impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It is often unclear precisely how further costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the classic discussions between logistics and generation on the one hand as well as advertising and marketing on the other hand, the long term will have to tell.
How is the Dutch food supply chain coping during the corona crisis?