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 in a way or another. One of the industries in which it was clearly visible is the agriculture as well as food industry.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on 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 exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was clear to numerous individuals that there was a significant impact at the tail end of the chain (e.g., hoarding in food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for that the impact is much less clear. It’s therefore important to determine how well the food supply chain as a whole is actually equipped to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need in retail up, contained food service down It is evident and widely known that demand in the foodservice channels went down due to the closure of joints, amongst others. In some instances, sales for suppliers in the food service industry as a result fell to about 20 % of the original volume. Being an adverse reaction, demand in the list stations went up and remained at a level of about 10-20 % higher than before the problems began.
Products which had to come from abroad had the own issues of theirs. With the change in demand from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup or plastic material was needed for use in consumer packaging. As much more of this packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a major impact on production activities. In a few cases, this even meant a complete stop in output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capability that is limited during the first weeks of the problems, and costs which are high for container transport as a result. Truck transportation experienced different problems. To begin with, there were uncertainties regarding how transport would be managed at borders, which in the end weren’t as strict as feared. That which was problematic in cases that are many , nevertheless, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the key things of supply chain resilience:
Using this framework for the analysis of the interviews, the findings indicate that not many companies were nicely prepared for the corona problems and in fact mainly applied responsive methods. The most important source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for flexibility and agility. This looks especially complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capability to accomplish that.
Next, it was found that more attention was necessary on spreading risk and aiming for risk reduction in the supply chain. For the future, meaning far more attention should be made available to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases where demand can’t be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This task isn’t new, but it’s also been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona problems teaches us that the financial impact of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It is often unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics 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 events. Regardless of whether the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand and marketing and advertising on the other, the potential future will need to explain to.
How is the Dutch food supply chain coping during the corona crisis?