Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been affected and all industries have been completely touched inside a way or even some other. One of the industries in which it was clearly noticeable will be the agriculture as well as food business.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to majority of folks that there was a great impact at the conclusion of this chain (e.g., hoarding doing grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for which the impact is much less clear. It’s therefore vital that you determine how effectively the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is evident and popular that need in the foodservice stations went down due to the closure of places, amongst others. In a few instances, sales for suppliers in the food service business thus fell to aproximatelly twenty % of the original volume. As an adverse reaction, demand in the retail stations went up and remained within a level of about 10-20 % higher than before the crisis began.
Products which had to come via abroad had the own problems of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass or plastic material was required for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a major affect on production activities. In certain instances, this even meant a complete stop in output (e.g. in the duck farming industry, which came to a standstill on account of demand fall out inside the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to 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 triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited throughout the first weeks of the crisis, and costs which are high for container transport as a consequence. Truck transport experienced different problems. To begin with, there were uncertainties on how transport will be handled at borders, which in the end weren’t as strict as feared. What was problematic in situations that are a large number of , nevertheless, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key elements of supply chain resilience:
Using this framework for the analysis of the interview, the results indicate that few businesses had been well prepared for the corona crisis and in reality mainly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
First, the need to develop the supply chain for versatility and agility. This seems particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capability to do it.
Next, it was found that much more interest was necessary on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning more attention has to be provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in situations where need cannot be met. Explicit prioritization is required to keep on to satisfy market expectations but also to increase market shares wherein competitors miss opportunities. This particular challenge isn’t new, however, it’s also been underexposed in this problems and was frequently not part of preparatory activities.
Fourthly, the corona crisis teaches us that the economic result of a crisis also depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how additional expenses (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain functions are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the classic considerations between logistics and production on the one hand and marketing and advertising on the other hand, the future will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?