Supply chain – The COVID-19 pandemic has certainly had its impact impact on the world. Economic indicators and health have been compromised and all industries have been touched inside a way or another. Among the industries in which this was clearly apparent will be the agriculture and food industry.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Though it was clear to most men and women that there was a great effect at the tail end of the chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for which the effect is much less clear. It’s therefore vital that you find out how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It is apparent and widely known that demand in the foodservice stations went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers in the food service business as a result fell to aproximatelly twenty % of the initial volume. As a complication, demand in the list channels went up and remained within a quality of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic was required for use in consumer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a big affect on output activities. In certain cases, this even meant the full stop of output (e.g. within the duck farming industry, which came to a standstill due to demand fall-out inside the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the issues, and expenses that are high for container transport as a consequence. Truck transport faced different issues. Initially, there were uncertainties regarding how transport will be managed for borders, which in the long run weren’t as stringent as feared. What was problematic in a large number of instances, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this key things of supply chain resilience:
Using this framework for the assessment of the interview, the findings indicate that not many businesses had been well prepared for the corona problems and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
To begin with, the need to create the supply chain for flexibility as well as agility. This appears particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the capacity to accomplish that.
Second, it was found that much more interest was needed on spreading threat and also aiming for risk reduction in the supply chain. For the future, this means more attention ought to be provided to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations where need 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 particular challenge isn’t new, however, it has additionally been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona problems shows us that the financial result of a crisis also relies on the way cooperation in the chain is set up. It’s typically unclear exactly how extra costs (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the traditional considerations between creation and logistics on the one hand as well as advertising on the other hand, the future must explain to.
How is the Dutch food supply chain coping during the corona crisis?