Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been touched in one of the ways or another. One of the industries in which it was clearly noticeable would be the farming and food business.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced 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 majority of individuals that there was a great impact at the tail end of the chain (e.g., hoarding doing food markets, 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 inside the source chain for which the effect is much less clear. It’s therefore important to figure out how effectively the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Need in retail up, in food service down It is evident and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the initial volume. As an adverse reaction, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic material was necessary for wearing in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant affect on production activities. In certain cases, this even meant a complete stop in output (e.g. in the duck farming business, which came to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability that is restricted throughout the very first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transport experienced different problems. At first, there were uncertainties regarding how transport will be handled at borders, which in the end were not as strict as feared. That which was problematic in instances that are most , however, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this primary things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings indicate that few companies were nicely prepared for the corona crisis and in reality mainly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This looks especially complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capability to do so.
Next, it was discovered that more attention was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, what this means is far more attention ought to be provided to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in situations in which demand can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to increase market shares in which competitors miss opportunities. This particular task is not new, but it’s also been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic result of a crisis in addition depends on the way cooperation in the chain is set up. It’s typically unclear exactly how further costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional discussions between generation and logistics on the one hand as well as advertising and marketing on the other, the potential future must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?