Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. health and Economic indicators have been compromised and all industries are touched in a way or even another. Among the industries in which this was clearly noticeable would be the agriculture and food industry.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to numerous folks that there was a great impact at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that the impact is less clear. It is therefore vital that you determine how well the food supply chain as a whole is actually prepared to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, contained food service down It’s evident and well known that need in the foodservice channels went down on account of the closure of places, amongst others. In a few cases, sales for vendors of the food service business as a result fell to aproximatelly twenty % of the first volume. As a complication, demand in the list stations went up and remained at a quality of about 10-20 % higher than before the crisis began.
Products which had to come through abroad had their very own issues. With the shift in demand coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass or plastic was needed for use in buyer packaging. As more of this particular product packaging material ended up in consumers’ homes rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant impact on production activities. In a few cases, this even meant the full stop in production (e.g. within the duck farming business, which emerged to a standstill due to demand fall-out inside the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in restricted transport capacity during the very first weeks of the problems, and costs which are high for container transport as a direct result. Truck transport encountered various issues. At first, there were uncertainties regarding how transport will be handled for borders, which in the long run were not as strict as feared. That which was problematic in instances that are a large number of , however, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this key elements of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions indicate that few organizations were well prepared for the corona crisis and actually mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was found that more attention was required on spreading risk and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention has to be given to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing strategies in situations in which demand can’t be met. Explicit prioritization is needed to continue to meet market expectations but also to boost market shares where competitors miss options. This challenge isn’t new, however, it’s in addition been underexposed in this crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial result of a crisis in addition 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 distributed in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally replace the traditional discussions between creation and logistics on the one hand as well as marketing on the other hand, the future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?