Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the planet. Economic indicators and health have been affected and all industries have been completely touched inside a way or yet another. One of the industries in which it was clearly noticeable will be the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry 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 in the food chain have major consequences for the Dutch economy and food security as lots of stakeholders are affected. Though it was clear to numerous people that there was a great impact at the end of the chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for that the impact is much less clear. It is therefore vital that you find out how properly the food supply chain as a whole is armed to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food resources chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand in retail up, found food service down It’s evident and well known that need in the foodservice channels went down due to the closure of places, amongst others. In certain instances, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the initial volume. As a complication, demand in the list stations went up and remained at a level of aproximatelly 10 20 % greater than before the problems began.
Products which had to come from abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, cup or plastic was necessary for use in customer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had an important affect on output activities. In a few instances, this even meant a total stop in production (e.g. within the duck farming business, which came to a standstill due to demand fall-out in the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is limited during the very first weeks of the issues, and expenses that are high for container transport as a result. Truck transport encountered various problems. To begin with, there were uncertainties on how transport will be managed for borders, which in the long run weren’t as stringent as feared. What was problematic in situations which are many, nevertheless, was the availability of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core elements of supply chain resilience:
Using this particular framework for the assessment of the interview, the conclusions indicate that few companies were nicely prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This looks especially complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do it.
Next, it was found that more interest was necessary on spreading danger and aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be made available to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in situations in which need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but also to increase market shares where competitors miss opportunities. This task isn’t new, though it has also been underexposed in this problems and was frequently not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the financial impact of a crisis additionally depends on the way cooperation in the chain is set up. It is typically unclear precisely how further costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally switch the traditional considerations between logistics and creation on the one hand and marketing on the other, the future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?