Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched in one way or perhaps some other. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade 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 of the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to numerous men and women that there was a great effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that will the impact is less clear. It is thus imperative that you determine how properly the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, contained food service down It’s obvious and popular that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service industry as a result fell to aproximatelly twenty % of the first volume. As a complication, demand in the retail stations went up and remained within a quality of aproximatelly 10-20 % greater than before the crisis started.
Products which had to come via abroad had their very own issues. With the change in need from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic material was required for use in customer packaging. As more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a major impact on production activities. In a few cases, this even meant a complete stop in production (e.g. inside the duck farming industry, which emerged to a standstill due to demand fall out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capacity that is restricted during the earliest weeks of the crisis, and costs which are high for container transport as a direct result. Truck transportation faced different issues. Initially, there were uncertainties on how transport will be handled at borders, which in the end were not as rigid as feared. What was problematic in situations which are most, however, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this main elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the conclusions indicate that not many organizations were well prepared for the corona crisis and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to design the supply chain for flexibility as well as agility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capability to do it.
Second, it was discovered that more interest was necessary on spreading threat as well as aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be given to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases in which need can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to improve market shares where competitors miss options. This particular challenge is not new, though it’s additionally been underexposed in this crisis and was usually not part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the monetary result of a crisis additionally is determined by the way cooperation in the chain is set up. It is typically unclear exactly how extra expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally replace the basic considerations between logistics and creation on the one hand as well as advertising and marketing on the other hand, the potential future must explain to.
How’s the Dutch food supply chain coping during the corona crisis?