Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been touched within one way or even some other. Among the industries in which this was clearly apparent will be the agriculture and food business.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality trade 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 as well as food security as lots of stakeholders are impacted. Even though it was clear to many men and women that there was a big effect at the conclusion of this chain (e.g., hoarding doing food markets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that the effect is much less clear. It is thus vital that you determine how well the food supply chain as a whole is actually equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, in food service down It’s evident and widely known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service industry thus fell to about twenty % of the original volume. As an adverse reaction, demand in the retail stations went up and remained at a level of about 10-20 % greater than before the crisis began.
Products that had to come from abroad had their very own problems. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic was required for wearing in consumer packaging. As much more of this particular product packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a big impact on output activities. In certain cases, this even meant a complete stop of production (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and costs that are high for container transport as a consequence. Truck transportation faced different issues. To begin with, there were uncertainties about how transport will be managed at borders, which in the long run were not as stringent as feared. That which was problematic in situations that are a large number of , nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the key components of supply chain resilience:
To us this particular framework for the assessment of the interview, the results show that few organizations had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This seems particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the potential to accomplish that.
Second, it was discovered that much more interest was needed on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, what this means is far more attention has to be provided to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as smart rationing strategies in situations in which demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but also to increase market shares in which competitors miss options. This particular task is not new, though it has also been underexposed in this crisis and was often not a component of preparatory activities.
Fourthly, the corona problems teaches us that the financial result of a crisis also relies on the way cooperation in the chain is set up. It is typically unclear how extra expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the basic discussions between generation and logistics on the one hand as well as marketing on the other hand, the future must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?