Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been completely touched inside one of the ways or perhaps another. Among the industries in which this was clearly obvious would be the agriculture as well as food industry.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of individuals that there was a great effect at the tail end of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for that will the effect is much less clear. It is thus important to find out how properly the food supply chain as being a whole is equipped to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supplies chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Need in retail up, contained food service down It’s apparent and widely known that need in the foodservice stations went down as a result of the closure of places, amongst others. In certain cases, sales for vendors in the food service business thus fell to aproximatelly 20 % of the first volume. Being a complication, demand in the list channels went up and remained within a quality of aproximatelly 10-20 % greater than before the problems began.
Products which had to come via abroad had their own issues. With the change in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was needed for wearing in customer packaging. As more of this packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a big affect on output activities. In some cases, this even meant a full stop in output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity that is limited during the very first weeks of the issues, and high expenses for container transport as a consequence. Truck transportation encountered various problems. To begin with, there were uncertainties regarding how transport will be managed at borders, which in the end were not as stringent as feared. The thing that was problematic in cases that are many , nonetheless, was the accessibility of motorists.
The reaction 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 main elements of supply chain resilience:
Using this framework for the analysis of the interviews, the conclusions show that few organizations were well prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for versatility and agility. This appears especially challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capability to accomplish that.
Second, it was observed that much more interest was needed on spreading risk as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in cases where need can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but also to boost market shares wherein competitors miss options. This challenge is not new, however, it’s additionally been underexposed in this specific crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic impact of a crisis additionally relies on the way cooperation in the chain is actually set up. It is typically unclear precisely how further costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the classic considerations between logistics and production on the one hand as well as marketing and advertising on the other hand, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?