Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. health and Economic indicators have been affected and all industries have been touched inside one of the ways or perhaps another. One of the industries in which this was clearly apparent is the agriculture as well as food business.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as many stakeholders are impacted. Even though it was clear to numerous folks that there was a big effect at the conclusion 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 finding customers), there are a lot of actors inside the source chain for which the impact is less clear. It is thus imperative that you determine how well the food supply chain as being a whole is armed to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food resources chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is apparent and well known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In some cases, sales for vendors of the food service business as a result fell to about 20 % of the original volume. Being a side effect, demand in the list channels went up and remained at a quality of aproximatelly 10-20 % higher than before the problems began.
Products which had to come through abroad had their very own problems. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was needed for use in buyer packaging. As more of this product packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had an important affect on output activities. In some cases, this even meant a complete stop in production (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capacity during the earliest weeks of the problems, and high costs for container transport as a consequence. Truck transport encountered different problems. At first, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as stringent as feared. What was problematic in most instances, nonetheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core elements of supply chain resilience:
Using this framework for the analysis of the interviews, the results indicate that few businesses had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to design the supply chain for agility as well as flexibility. This looks particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the potential to accomplish that.
Next, it was found that more attention was required on spreading threat and also aiming for risk reduction inside the supply chain. For the future, this means more attention has to be given to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations in which demand cannot be met. Explicit prioritization is necessary to continue to meet market expectations but also to boost market shares where competitors miss options. This challenge isn’t new, but it’s additionally been underexposed in this specific crisis and was frequently not part of preparatory activities.
Fourthly, the corona issues shows us that the financial effect of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is typically unclear precisely how extra costs (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functions are actually in the driving seat during a crisis. Product development and marketing 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 marketing on the other, the potential future must explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?