Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been affected and all industries have been completely touched inside one of the ways or even some other. One of the industries in which it was clearly visible would be the farming as well as food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at 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 and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to numerous folks that there was a great impact at the conclusion of the chain (e.g., hoarding around supermarkets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that the effect is less clear. It’s thus imperative that you figure out how well the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Demand in retail up, in food service down It is evident and popular that need in the foodservice channels went down due to the closure of places, amongst others. In some cases, sales for suppliers of the food service industry as a result fell to about 20 % of the initial volume. Being a side effect, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % greater than before the crisis began.
Products that had to come from abroad had their very own issues. With the change in demand coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass or plastic was necessary for wearing in customer packaging. As more of this packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had an important impact on output activities. In certain instances, this even meant a full stop of output (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability which is restricted throughout the earliest weeks of the issues, and costs that are high for container transport as a direct result. Truck transportation encountered different issues. To begin with, there were uncertainties on how transport will be managed at borders, which in the long run were not as rigid as feared. The thing that was problematic in most cases, nonetheless, was the availability 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 core components of supply chain resilience:
To us this framework for the evaluation of the interviews, the conclusions show that not many companies were nicely prepared for the corona problems and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This looks especially complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to do so.
Next, it was found that much more interest was required on spreading threat and aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be given to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually needed to continue to meet market expectations but also to improve market shares wherein competitors miss opportunities. This challenge is not new, although it has also been underexposed in this problems and was often not a component of preparatory activities.
Fourthly, the corona problems teaches us that the monetary effect of a crisis also relies on the way cooperation in the chain is set up. It is typically unclear how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the basic discussions between generation and logistics on the one hand as well as advertising on the other, the long term must explain to.
How’s the Dutch food supply chain coping during the corona crisis?