Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched in one way or another. Among the industries in which it was clearly apparent will be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was apparent to most folks that there was a big impact at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors within the supply chain for that will the impact is less clear. It is thus imperative that you determine how effectively the food supply chain as a whole is equipped to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need within retail up, in food service down It’s apparent and popular that demand in the foodservice stations went down as a result of the closure of places, amongst others. In certain cases, sales for vendors in the food service business therefore fell to about 20 % of the original volume. Being a side effect, 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 shift in need from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic was required for wearing in customer packaging. As much more of this packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a significant affect on production activities. In a few cases, this even meant the full stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capacity which is restricted during the first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transport experienced different problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the end were not as rigid as feared. That which was problematic in most situations, nevertheless, was the availability 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 things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions show that few businesses were well prepared for the corona crisis and actually mostly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This looks particularly challenging 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 capability to do it.
Second, it was observed that much more attention was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be given to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases where demand cannot be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to increase market shares in which competitors miss opportunities. This challenge isn’t new, but it’s in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona problems shows us that the monetary impact of a crisis also relies on the manner in which cooperation in the chain is set up. It is typically unclear exactly how extra expenses (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain features are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as marketing on the other hand, the potential future must explain to.
How’s the Dutch food supply chain coping during the corona crisis?