Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries have been touched within one way or even another. One of the industries in which it was clearly apparent will be the agriculture and food industry.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to many men and women that there was a great effect at the tail end of the chain (e.g., hoarding around grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the supply chain for that will the effect is less clear. It is therefore imperative that you determine how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s evident and widely known that need in the foodservice stations went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry therefore fell to aproximatelly 20 % of the initial volume. Being an adverse reaction, demand in the retail stations went up and remained within a quality of aproximatelly 10-20 % higher than before the crisis began.
Goods that had to come through abroad had their very own issues. With the change in need coming from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was required for use in customer packaging. As much more of this particular packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important effect on production activities. In a few cases, this even meant a complete stop in output (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall-out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity throughout the first weeks of the problems, and high costs for container transport as a direct result. Truck travel experienced various problems. Initially, there were uncertainties about how transport would be handled for borders, which in the end weren’t as stringent as feared. That which was problematic in cases which are many, however, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key components of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings indicate that not many organizations had been nicely prepared for the corona crisis and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility and versatility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the potential to do so.
Second, it was observed that much more attention was necessary on spreading risk and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be given to the way businesses depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to improve market shares where competitors miss options. This particular challenge is not new, although it’s in addition been underexposed in this problems and was usually not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic result of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It is typically unclear how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally change the classic discussions between logistics and production on the one hand and advertising and marketing on the other hand, the long term must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?