Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. Economic indicators and health have been affected and all industries are touched inside a way or yet another. Among the industries in which it was clearly obvious would be the farming and food business.
In 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to majority of people that there was a great impact at the tail end of this chain (e.g., hoarding around food markets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for which the impact is less clear. It’s thus important to determine how effectively the food supply chain as a whole is prepared to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food resources chain. They based their analysis on interviews with about 30 Dutch source chain actors.
Need within retail up, that is found food service down It’s obvious and popular that demand in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for suppliers of the food service business therefore fell to about twenty % of the initial volume. Being an adverse reaction, demand in the retail stations went up and remained within a quality of about 10-20 % higher than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the change in need from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was required for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a major impact on output activities. In some instances, this even meant a complete stop of production (e.g. within the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in limited transport capacity during the first weeks of the issues, and costs that are high for container transport as a direct result. Truck travel faced various problems. To begin with, there were uncertainties regarding how transport would be managed for borders, which in the long run were not as rigid as feared. The thing that was problematic in cases that are many , nevertheless, was the availability of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the primary elements of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions show that few businesses were well prepared for the corona problems and in fact mostly applied responsive methods. Probably the most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This seems especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to do so.
Second, it was discovered that much more interest was necessary on spreading risk and aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be made available to the way organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases where demand can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to boost market shares where competitors miss options. This task is not new, however, it has additionally been underexposed in this crisis and was often not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial result of a crisis additionally relies on the way cooperation in the chain is actually set up. It is typically unclear exactly how further 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 operates are actually in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the basic considerations between generation and logistics on the one hand as well as advertising and marketing on the other, the long term must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?