Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. Economic indicators and health have been compromised and all industries have been touched inside one way or another. One of the industries in which it was clearly visible is the agriculture and food business.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was apparent to majority of men and women that there was a huge effect at the tail end of this chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that will the impact is less clear. It’s therefore imperative that you find out how properly the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also out of 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 the examination of theirs on interviews with about thirty Dutch source chain actors.
Need within retail up, contained food service down It’s obvious and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain cases, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the first volume. Being a complication, demand in the list channels went up and remained within a degree of about 10 20 % higher than before the crisis began.
Goods that had to come through abroad had their own problems. With the change in demand coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic material was needed for wearing in buyer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a big affect on output activities. In some cases, this even meant a complete stop in output (e.g. in the duck farming business, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities 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 electrical capacity that is limited during the earliest weeks of the problems, and costs which are high for container transport as a consequence. Truck travel encountered various issues. To begin with, there were uncertainties regarding how transport will be handled at borders, which in the end weren’t as stringent as feared. What was problematic in situations that are most , however, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this primary things of supply chain resilience:
Using this framework for the assessment of the interview, the findings show that few companies had been nicely prepared for the corona crisis and in reality mainly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This looks particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Second, it was discovered that much more attention was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be provided to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing techniques in situations where demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but in addition to increase market shares where competitors miss opportunities. This task is not new, but it has in addition been underexposed in this specific crisis and was usually not a part of preparatory activities.
Fourthly, the corona issues shows us that the monetary result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It’s often unclear precisely how additional expenses (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally switch the classic considerations between logistics and production on the one hand as well as advertising and marketing on the other hand, the long term must tell.
How is the Dutch foods supply chain coping throughout the corona crisis?