Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. health and Economic indicators have been affected and all industries are touched in one way or even yet another. Among the industries in which it was clearly obvious will be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to majority of men and women that there was a significant effect at the end of this chain (e.g., hoarding around food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for that the impact is much less clear. It’s therefore imperative that you find out how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, found food service down It is apparent and widely known that need in the foodservice channels went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service industry as a result fell to aproximatelly 20 % of the initial volume. Being a complication, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % greater than before the crisis began.
Products which had to come through abroad had their very own issues. With the shift in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic was required for use in buyer packaging. As much more of this packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had an important effect on output activities. In certain instances, this even meant a total stop of production (e.g. inside the duck farming industry, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is restricted throughout the very first weeks of the issues, and expenses that are high for container transport as a result. Truck transportation encountered different issues. At first, there were uncertainties about how transport would be handled for borders, which in the end weren’t as strict as feared. What was problematic in instances which are most, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the core components of supply chain resilience:
To us this framework for the assessment of the interview, the results indicate that few companies were well prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This seems particularly complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Second, it was found that much more interest was necessary on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention should be provided to the way companies depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as clever rationing strategies in situations in which need cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to boost market shares where competitors miss options. This task is not new, but it has in addition been underexposed in this specific crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows you us that the economic result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s typically unclear precisely how extra costs (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 characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the traditional discussions between logistics and production on the one hand and marketing and advertising on the other, the potential future will have to tell.
How is the Dutch food supply chain coping during the corona crisis?