Supply chain – The COVID-19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been affected and all industries are touched within one of the ways or some other. Among the industries in which this was clearly obvious will be the agriculture and food industry.
Throughout 2019, the Dutch extension as well as food sector 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 inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to a lot of individuals that there was a huge effect at the conclusion of this chain (e.g., hoarding around food markets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find many actors in the supply chain for that the impact is much less clear. It is thus important to determine how properly the food supply chain as a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, in food service down It is apparent and widely known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In a few instances, sales for suppliers in the food service industry thus fell to about 20 % of the initial volume. Being a side effect, demand in the list stations went up and remained at a quality of about 10-20 % greater than before the crisis started.
Products that had to come from abroad had the own problems of theirs. With the shift in need from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic was required for wearing in customer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a significant affect on output activities. In a few cases, this even meant the full stop of production (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capacity which is limited during the earliest weeks of the problems, and expenses which are high for container transport as a direct result. Truck travel faced different issues. Initially, there were uncertainties regarding how transport will be managed for borders, which in the long run were not as strict as feared. The thing that was problematic in cases that are many , however, was the availability of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
Using this particular framework for the assessment of the interview, the conclusions indicate that not many companies were nicely prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to design the supply chain for agility and flexibility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to accomplish that.
Second, it was observed that much more attention was required on spreading danger as well as aiming for risk reduction within the supply chain. For the future, this means more attention has to be made available to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in situations where need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to improve market shares wherein competitors miss opportunities. This particular task is not new, although it has in addition been underexposed in this specific crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial result of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It’s typically unclear exactly how extra expenses (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain functions are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional considerations between generation and logistics on the one hand as well as marketing on the other, the future will have to tell.
How is the Dutch food supply chain coping throughout the corona crisis?