Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched within one of the ways or even another. Among the industries in which this was clearly noticeable is the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to many men and women that there was a huge impact at the end of this chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the supply chain for that will the impact is much less clear. It’s thus important to determine how effectively the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Demand in retail up, in food service down It is apparent and popular that need in the foodservice channels went down due to the closure of places, amongst others. In certain cases, sales for vendors of the food service business as a result fell to aproximatelly twenty % of the original volume. As a complication, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % higher than before the problems began.
Products that had to come through abroad had their very own issues. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, cup and plastic was required for wearing in customer packaging. As much more of this product packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In a few cases, this even meant a full stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity that is restricted throughout the first weeks of the issues, and high costs for container transport as a consequence. Truck transportation experienced various problems. At first, there were uncertainties about how transport will be managed for borders, which in the end weren’t as rigid as feared. What was problematic in cases which are a large number of, nevertheless, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the key things of supply chain resilience:
To us this particular framework for the analysis of the interview, the results show that not many companies had been nicely prepared for the corona crisis and actually mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This seems especially complicated for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was observed that much more attention was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is more attention has to be made available to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases where demand can’t be met. Explicit prioritization is required to keep on to meet market expectations but also to increase market shares wherein competitors miss opportunities. This challenge isn’t new, however, it’s also been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial impact of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear how extra expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand and advertising on the other hand, the future will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?