Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. Economic indicators and health have been affected and all industries have been touched within a way or even some other. Among the industries in which this was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was clear to most men and women that there was a great effect at the conclusion of the chain (e.g., hoarding around supermarkets, eateries 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 impact is much less clear. It’s thus imperative that you determine how well the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need in retail up, in food service down It’s apparent and widely known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In some cases, sales for suppliers in the food service industry therefore fell to aproximatelly twenty % of the original volume. Being a complication, demand in the retail stations went up and remained within a quality of aproximatelly 10 20 % higher than before the crisis started.
Products which had to come from abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic was needed for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a big affect on output activities. In some cases, this even meant a total stop of production (e.g. within the duck farming industry, which emerged to a standstill due to demand fall out in the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability that is limited during the earliest weeks of the crisis, and expenses that are high for container transport as a consequence. Truck travel faced various issues. Initially, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in many instances, nonetheless, was the availability of motorists.
The response 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 primary elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the findings show that few businesses had been nicely prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was observed that more interest was required on spreading risk as well as aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in cases where need can’t be met. Explicit prioritization is required to keep on to meet market expectations but also to increase market shares in which competitors miss options. This particular challenge is not new, although it has in addition been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the economic result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat 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 switch the traditional considerations between generation and logistics on the one hand and advertising and marketing on the other hand, the potential future must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?