Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. health and Economic indicators have been compromised and all industries are touched in one way or perhaps another. One of the industries in which this was clearly visible will be the agriculture and food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 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 effects for the Dutch economy as well as food security as lots of stakeholders are affected. Despite the fact that it was clear to many individuals that there was a great effect at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for which the impact is much less clear. It’s therefore imperative that you find out how well the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need in retail up, in food service down It is evident and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for vendors in the food service industry therefore fell to aproximatelly twenty % of the first volume. As a complication, demand in the list stations went up and remained within a quality of about 10-20 % higher than before the problems began.
Products that had to come through abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the need for packaging changed considerably, More tin, cup or plastic was required for use in customer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a big impact on output activities. In certain cases, this even meant the full stop in production (e.g. in the duck farming business, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a significant section 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 pretty shortly in 2020. This resulted in transport capacity which is restricted during the very first weeks of the problems, and costs that are high for container transport as a consequence. Truck travel experienced various problems. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the long run weren’t as rigid as feared. That which was problematic in instances which are many, nonetheless, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the key components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings show that not many organizations were well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capacity to accomplish that.
Second, it was found that much more interest was needed on spreading danger and aiming for risk reduction inside the supply chain. For the future, this means far more attention has to be provided to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in situations in which demand can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but also to improve market shares where competitors miss opportunities. This challenge is not new, though it’s also been underexposed in this specific problems and was usually not a component of preparatory activities.
Fourthly, the corona problems teaches us that the economic effect of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It is often unclear how further expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic considerations between production and logistics on the one hand as well as advertising on the other hand, the long term will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?