Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. health and Economic indicators have been affected and all industries are touched inside one way or yet another. Among the industries in which this was clearly obvious is the agriculture as well as food business.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 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 effects for the Dutch economy and food security as lots of stakeholders are affected. Though it was clear to many individuals that there was a great effect at the end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that the impact is much less clear. It is thus important to determine how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, contained food service down It’s apparent and well known that need in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the initial volume. Being a side effect, demand in the retail channels went up and remained at a degree of about 10-20 % higher than before the crisis started.
Goods that had to come from abroad had their own problems. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic was necessary for wearing in buyer packaging. As more of this product packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a major impact on output activities. In certain cases, this even meant a full stop of output (e.g. within the duck farming industry, which came to a standstill due to demand fall out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the various meats 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 bins to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited throughout the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck travel faced various issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the end weren’t as rigid as feared. What was problematic in most situations, nonetheless, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this main elements of supply chain resilience:
Using this framework for the evaluation of the interview, the findings show that few companies were nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to do it.
Second, it was observed that more attention was required on spreading threat and aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be given to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in situations in which need cannot be met. Explicit prioritization is actually required to keep on to satisfy market expectations but also to increase market shares where competitors miss options. This particular task is not new, but it’s also been underexposed in this problems and was often not part of preparatory activities.
Fourthly, the corona crisis shows us that the financial result of a crisis in addition relies on the way cooperation in the chain is set up. It is usually unclear exactly how extra expenses (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain features are in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the traditional considerations between logistics and creation on the one hand as well as marketing on the other hand, the long term will need to explain to.
How is the Dutch foods supply chain coping during the corona crisis?