Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been completely touched inside a way or another. Among the industries in which it was clearly visible will be the agriculture and food business.
In 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 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 in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was clear to most men and women that there was a huge impact at the end of the chain (e.g., hoarding doing food markets, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), there are many actors inside the source chain for that the effect is much less clear. It’s therefore vital that you determine how effectively the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also coming 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 around thirty Dutch supply chain actors.
Need in retail up, found food service down It is evident and well known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for suppliers of the food service industry thus fell to about 20 % of the first volume. Being a complication, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the problems started.
Products that had to come via abroad had the own problems of theirs. With the change in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, cup and plastic was required for use in buyer packaging. As much more of this particular packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a big effect on output activities. In certain cases, this even meant a complete stop of production (e.g. inside the duck farming industry, which came to a standstill on account of demand fall-out inside the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the issues, and high costs for container transport as a consequence. Truck transport encountered different problems. Initially, there were uncertainties on how transport will be handled at borders, which in the end weren’t as stringent as feared. That which was problematic in cases that are most , nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the key components of supply chain resilience:
To us this framework for the analysis of the interviews, the results indicate that few businesses were well prepared for the corona problems and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This seems particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the potential to accomplish that.
Second, it was found that much more attention was required on spreading threat as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention has to be made available to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases where demand cannot be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to boost market shares in which competitors miss opportunities. This particular task isn’t new, however, it has additionally been underexposed in this problems and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial effect of a crisis also depends on the manner in which cooperation in the chain is actually set up. It is typically unclear how further expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional discussions between creation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to explain to.
How is the Dutch food supply chain coping during the corona crisis?