Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. Economic indicators and health have been compromised and all industries have been touched inside one of the ways or perhaps yet another. Among the industries in which this was clearly visible would be the agriculture as well as food business.
Throughout 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was clear to a lot of individuals that there was a huge impact at the end of the chain (e.g., hoarding around grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are numerous actors in the source chain for which the impact is much less clear. It’s therefore imperative that you figure out how properly the food supply chain as a whole is equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Need within retail up, that is found food service down It’s obvious and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In certain cases, sales for vendors in the food service industry therefore fell to aproximatelly twenty % of the initial volume. Being a complication, demand in the retail stations went up and remained within a quality of about 10-20 % higher than before the problems started.
Goods that had to come from abroad had the own problems of theirs. With the change in demand from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic was necessary for wearing in buyer packaging. As much more of this particular product packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a significant effect on production activities. In some cases, this even meant a total stop of production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity which is limited during the first weeks of the problems, and high expenses for container transport as a direct result. Truck transportation experienced various issues. Initially, there were uncertainties about how transport would be managed at borders, which in the end were not as strict as feared. The thing that was problematic in a large number of situations, nonetheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the core things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions show that few businesses had been well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This appears particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to accomplish that.
Next, it was found that much more attention was required on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, this means more attention has to be made available to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in situations in which need can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to increase market shares where competitors miss options. This particular challenge is not new, although it’s in addition been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the financial impact of a crisis additionally is determined by the way cooperation in the chain is set up. It is typically unclear precisely how additional costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the basic considerations between production and logistics on the one hand as well as advertising on the other, the potential future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?