Supply chain – The COVID-19 pandemic has certainly had its impact impact on the world. health and Economic indicators have been affected and all industries have been completely touched inside a way or some other. Among the industries in which it was clearly visible will be the agriculture and food industry.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 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 in the food chain have big effects for the Dutch economy and food security as many stakeholders are impacted. Though it was apparent to most men and women that there was a great impact at the conclusion of this chain (e.g., hoarding around food markets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors in the source chain for that the impact is less clear. It’s therefore vital that you figure out how effectively 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 Faculty and also out of 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 around 30 Dutch source chain actors.
Demand within retail up, in food service down It is obvious and well known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In a few cases, sales for suppliers of the food service industry as a result fell to about 20 % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic material was required for use in buyer packaging. As more of this product packaging material concluded up in consumers’ homes as opposed to in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In a few instances, this even meant a complete stop of production (e.g. in the duck farming business, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity which is restricted during the very first weeks of the issues, and expenses that are high for container transport as a consequence. Truck travel experienced various issues. At first, there were uncertainties on how transport would be managed for borders, which in the end were not as strict as feared. What was problematic in instances which are a large number of, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the primary things of supply chain resilience:
To us this particular framework for the analysis of the interviews, the results show that not many organizations had been well prepared for the corona crisis and actually mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as versatility. This seems particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the potential to do it.
Next, it was found that more interest was needed on spreading risk and also aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be given to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in cases where need cannot be met. Explicit prioritization is actually needed to continue to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This challenge isn’t new, however, it’s additionally been underexposed in this specific problems and was often not a component of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s usually unclear exactly how extra costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally change the traditional considerations between logistics and generation on the one hand and advertising and marketing on the other hand, the potential future will need to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?