Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the planet. health and Economic indicators have been affected and all industries have been touched within a way or even some other. Among the industries in which it was clearly obvious is the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality business 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 significant effects for the Dutch economy and food security as many stakeholders are impacted. Even though it was apparent to many people that there was a huge effect at the conclusion of this chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that the effect is less clear. It’s therefore imperative that you find out how well the food supply chain as a whole is actually prepared to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, in food service down It is apparent and well known that need in the foodservice channels went down due to the closure of places, amongst others. In some instances, sales for suppliers in the food service industry as a result fell to about twenty % of the initial volume. As a side effect, demand in the retail stations went up and remained within a degree of about 10-20 % greater than before the crisis began.
Goods that had to come from abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was needed for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ houses rather than in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had an important affect on production activities. In certain cases, this even meant a complete stop in production (e.g. inside the duck farming industry, which came to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport capability throughout the very first weeks of the problems, and costs which are high for container transport as a direct result. Truck transportation faced different problems. At first, there were uncertainties on how transport will be managed for borders, which in the end were not as stringent as feared. That which was problematic in situations which are a large number of, nevertheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the results indicate that few businesses had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to create the supply chain for flexibility and agility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to accomplish that.
Second, it was observed that much more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, what this means is more attention has to be provided to the way organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to increase market shares in which competitors miss opportunities. This challenge is not new, although it’s also been underexposed in this problems and was often not a component of preparatory activities.
Fourthly, the corona problems shows us that the economic impact of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is typically unclear precisely how further costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain features are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the classic discussions between creation and logistics on the one hand as well as marketing on the other, the future will have to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?