Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries have been completely touched within one of the ways or even another. Among the industries in which this was clearly visible will be the agriculture and food industry.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 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 major effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to majority of folks that there was a huge impact at the end of this chain (e.g., hoarding around grocery stores, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that will the effect is much less clear. It is therefore imperative that you determine how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Demand in retail up, that is found food service down It is evident and widely known that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry as a result fell to aproximatelly 20 % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained within a level of aproximatelly 10 20 % higher than before the problems began.
Products which had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic was necessary for wearing in customer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in desire have had a significant impact on production activities. In some instances, this even meant a total stop of output (e.g. in the duck farming industry, which emerged to a standstill due to demand fall-out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the problems, and high expenses for container transport as a consequence. Truck travel encountered different issues. Initially, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as rigid as feared. What was problematic in a large number of situations, nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the results indicate that not many businesses were nicely prepared for the corona problems and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
For starters, the need to develop the supply chain for agility as well as flexibility. This appears particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to accomplish that.
Next, it was observed that more interest was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be provided to the way companies depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in cases in which need cannot be met. Explicit prioritization is required to keep on to satisfy market expectations but also to increase market shares wherein competitors miss options. This particular challenge is not new, however, it has in addition been underexposed in this crisis and was often not a component of preparatory pursuits.
Fourthly, the corona issues shows us that the financial effect of a crisis in addition relies on the way cooperation in the chain is set up. It’s usually unclear precisely how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the classic considerations between logistics and generation on the one hand as well as marketing and advertising on the other hand, the potential future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?