Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries have been touched within one of the ways or some other. One of the industries in which this was clearly visible would be the agriculture as well as food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was clear to majority of individuals that there was a huge impact at the tail end of this chain (e.g., hoarding around supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that the impact is much less clear. It is thus vital that you figure out how properly the food supply chain as being a whole is equipped to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around thirty Dutch source chain actors.
Demand within retail up, found food service down It’s apparent and widely known that demand in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service industry therefore fell to about twenty % of the first volume. As an adverse reaction, demand in the retail channels went up and remained within a quality of about 10 20 % higher than before the crisis began.
Products which had to come through abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic was required for wearing in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important effect on output activities. In a few cases, this even meant the full stop of production (e.g. within the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capacity throughout the very first weeks of the crisis, and high costs for container transport as a direct result. Truck transportation faced various issues. At first, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as stringent as feared. That which was problematic in cases that are a large number of , nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this key elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the findings show that few organizations were well prepared for the corona crisis and in fact mostly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to create the supply chain for agility and versatility. This seems particularly challenging for smaller 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 accomplish that.
Next, it was found that much more interest was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be provided to the manner in which businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to continue to meet market expectations but also to improve market shares in which competitors miss options. This challenge isn’t new, however, it has in addition been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the economic result of a crisis also is determined by the way cooperation in the chain is set up. It is often unclear how further costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally replace the classic considerations between logistics and creation on the one hand and marketing and advertising on the other hand, the potential future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?