Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the planet. Economic indicators and health have been compromised and all industries are touched within a way or perhaps another. Among the industries in which it was clearly visible will be the agriculture and food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover 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 effects for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was clear to a lot of men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the supply chain for which the impact is much less clear. It is thus important to determine how properly the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need within retail up, that is found food service down It’s evident and well known that demand in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for suppliers in the food service business therefore fell to about twenty % of the first volume. As a complication, demand in the list channels went up and remained at a level of aproximatelly 10-20 % higher than before the crisis began.
Goods that had to come through abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic material was necessary for use in customer packaging. As much more of this product packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important affect on production activities. In a few cases, this even meant a total stop in production (e.g. inside the duck farming business, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the problems, and expenses that are high for container transport as a direct result. Truck transport faced different issues. At first, there were uncertainties on how transport will be handled at borders, which in the long run weren’t as strict as feared. What was problematic in most instances, nonetheless, was the availability of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the key elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the findings indicate that few organizations were nicely prepared for the corona problems and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This appears particularly complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to do it.
Next, it was found that more interest was needed on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning more attention should be provided to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases in which demand can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but also to increase market shares wherein competitors miss options. This challenge is not new, however, it has also been underexposed in this crisis and was often not a part of preparatory activities.
Fourthly, the corona issues shows us that the economic result of a crisis additionally relies on the way cooperation in the chain is set up. It’s typically unclear how extra costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain functionality are in the driving seat during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic considerations between creation and logistics on the one hand and advertising and marketing on the other hand, the potential future must tell.
How is the Dutch food supply chain coping throughout the corona crisis?