Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the planet. health and Economic indicators have been affected and all industries are touched inside one of the ways or some other. One of the industries in which this was clearly visible is the agriculture and food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was clear to numerous individuals that there was a great effect at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for that will the impact is less clear. It’s therefore imperative that you determine how properly the food supply chain as being a whole is equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, found food service down It is obvious and well known that need in the foodservice channels went down on account of the closure of joints, amongst others. In a few instances, sales for suppliers of the food service business therefore fell to aproximatelly 20 % of the first volume. As a side effect, demand in the retail channels went up and remained at a quality of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come from abroad had their own problems. With the shift in demand coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic was necessary for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In certain cases, this even meant a complete stop in production (e.g. in the duck farming business, which came to a standstill on account of demand fall-out on the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity which is restricted during the very first weeks of the problems, and costs that are high for container transport as a result. Truck transportation faced various issues. Initially, there were uncertainties about how transport will be handled at borders, which in the long run were not as stringent as feared. That which was problematic in cases that are a large number of , nevertheless, was the availability of drivers.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the core elements of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the conclusions show that few companies had been nicely prepared for the corona crisis and actually mostly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for agility as well as flexibility. This seems particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to do so.
Second, it was observed that more interest was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention should be made available to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases where demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to improve market shares where competitors miss options. This particular task isn’t new, although it has in addition been underexposed in this specific crisis and was usually not a component of preparatory activities.
Fourthly, the corona issues teaches us that the financial effect of a crisis in addition is determined by the way cooperation in the chain is set up. It is often unclear exactly how further expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain capabilities are actually in the driving accommodate 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 change the basic discussions between creation and logistics on the one hand as well as advertising and marketing on the other, the long term must explain to.
How’s the Dutch foods supply chain coping during the corona crisis?