Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. health and Economic indicators have been compromised and all industries are touched within a way or some other. Among the industries in which this was clearly noticeable will be the agriculture and food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are impacted. Even though it was apparent to a lot of individuals that there was a big effect at the end of the chain (e.g., hoarding doing grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for which the effect is less clear. It is therefore important to figure out how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, in food service down It’s apparent and popular that need in the foodservice channels went down due to the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the original volume. Being an adverse reaction, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come through abroad had the own problems of theirs. With the change in desire coming from foodservice to retail, the need for packaging improved considerably, More tin, cup or plastic material was needed for wearing in buyer packaging. As more of this particular packaging material ended up in consumers’ houses as opposed to in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant a total stop of production (e.g. in the duck farming business, which emerged to a standstill due to demand fall out inside the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capability during the very first weeks of the crisis, and costs that are high for container transport as a direct result. Truck travel experienced different problems. To begin with, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as rigid as feared. That which was problematic in cases that are many , nevertheless, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core components of supply chain resilience:
Using this framework for the analysis of the interviews, the results show that few businesses were well prepared for the corona crisis and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility as well as flexibility. This seems particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to accomplish that.
Second, it was observed that much more interest was necessary on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be given to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing techniques in cases in which need cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but also to improve market shares in which competitors miss options. This particular task isn’t new, however, it’s also been underexposed in this crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows us that the economic result of a crisis additionally depends on the way cooperation in the chain is set up. It is typically unclear exactly how further expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the basic considerations between logistics and production on the one hand and marketing and advertising on the other, the long term must tell.
How’s the Dutch food supply chain coping throughout the corona crisis?