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 within one of the ways or perhaps another. One of the industries in which it was clearly obvious will be the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Though it was apparent to numerous folks that there was a huge impact at the tail end of this chain (e.g., hoarding doing food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors within the source chain for that will the effect is less clear. It’s thus vital that you determine how properly the food supply chain as a whole is armed to cope 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 effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around 30 Dutch source chain actors.
Demand in retail up, in food service down It’s apparent and widely known that need in the foodservice channels went down on account of the closure of places, amongst others. In a few instances, sales for suppliers in the food service business thus fell to aproximatelly 20 % of the initial volume. Being an adverse reaction, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % higher than before the crisis began.
Products which had to come through abroad had their own problems. With the change in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, glass or plastic was required for wearing in customer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a significant impact on output activities. In some cases, this even meant a full stop of output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other instances, a big 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 start of the Corona crisis of China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capacity that is limited throughout the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport experienced various problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as stringent as feared. The thing that was problematic in instances which are most, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this core things of supply chain resilience:
Using this framework for the analysis of the interviews, the findings show that not many companies were nicely prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
First, the need to design the supply chain for agility as well as flexibility. This looks especially challenging for smaller 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 it.
Next, it was found that more attention was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be made available to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in situations where need cannot be met. Explicit prioritization is required to continue to satisfy market expectations but in addition to improve market shares wherein competitors miss opportunities. This challenge is not new, however, it’s additionally been underexposed in this problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary effect of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is usually unclear precisely how additional expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the classic discussions between logistics and production on the one hand as well as advertising and marketing on the other, the future must explain to.
How’s the Dutch foods supply chain coping during the corona crisis?