Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been completely touched within one of the ways or even some other. One of the industries in which it was clearly visible will be the agriculture and food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many men and women that there was a huge impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors in the supply chain for which the effect is less clear. It is thus vital that you determine how properly the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Demand in retail up, contained food service down It’s evident and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for vendors in the food service industry thus fell to aproximatelly twenty % of the original volume. Being a complication, demand in the list channels went up and remained within a degree of about 10-20 % higher than before the crisis began.
Goods that had to come through abroad had their very own issues. With the change in desire from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic material was needed for use in consumer packaging. As much more of this product packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a big impact on production activities. In some cases, this even meant a full stop in output (e.g. in the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in restricted transport capacity throughout the first weeks of the crisis, and expenses which are high for container transport as a direct result. Truck transportation encountered various problems. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the long run were not as rigid as feared. The thing that was problematic in a large number of cases, nonetheless, was the availability of drivers.
The reaction to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the key things of supply chain resilience:
Using this framework for the assessment of the interviews, the results indicate that few businesses had been well prepared for the corona crisis and actually mainly applied responsive methods. The most important source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This appears especially complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capacity to do it.
Next, it was observed that much more attention was required on spreading danger and also aiming for risk reduction in the supply chain. For the future, what this means is more attention should be made available to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss options. This task is not new, although it has in addition been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona problems shows you us that the monetary effect of a crisis additionally depends on the manner in which cooperation in the chain is set up. It’s usually unclear how additional expenses (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the basic discussions between generation and logistics on the one hand and marketing on the other hand, the potential future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?