Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the planet. health and Economic indicators have been compromised and all industries are touched in a way or even yet another. One of the industries in which it was clearly obvious will be the agriculture and food business.
Throughout 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 business in the Netherlands lost € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was clear to majority of folks that there was a big effect at the conclusion of the chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the supply chain for that the impact is much less clear. It’s therefore important to find out how effectively the food supply chain as a whole is actually prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Need within retail up, contained food service down It is apparent and popular that need in the foodservice stations went down due to the closure of restaurants, amongst others. In certain instances, sales for vendors in the food service business as a result fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the retail stations went up and remained at a quality of aproximatelly 10-20 % higher than before the problems started.
Products which had to come through abroad had their very own issues. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass or plastic material was necessary for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a major impact on output activities. In a few cases, this even meant the full stop of output (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity that is limited throughout the earliest weeks of the issues, and high expenses for container transport as a result. Truck transportation experienced various issues. Initially, there were uncertainties on how transport would be managed for borders, which in the long run were not as rigid as feared. That which was problematic in situations which are most, nevertheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key things of supply chain resilience:
Using this framework for the assessment of the interview, the conclusions indicate that not many businesses had been nicely prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most important source 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 seems especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to accomplish that.
Next, it was observed that more interest was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be made available to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in cases in which demand can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to boost market shares where competitors miss opportunities. This particular challenge is not new, although it’s also been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona issues shows you us that the economic effect of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is usually unclear exactly how extra expenses (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic considerations between logistics and production on the one hand as well as advertising on the other hand, the future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?