Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries are touched within a way or even another. Among the industries in which it was clearly noticeable is the agriculture as well as food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to a lot of folks that there was a great effect at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for which the effect is much less clear. It’s thus imperative that you figure out how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Need in retail up, that is found food service down It’s obvious and popular that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the list stations went up and remained within a quality of about 10-20 % higher than before the crisis started.
Products which had to come from abroad had the own problems of theirs. With the shift in need from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic was necessary for wearing in buyer packaging. As much more of this particular packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a major effect on output activities. In a few instances, this even meant the full stop of production (e.g. in the duck farming business, which came to a standstill due to demand fall-out in the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the problems, and high expenses for container transport as a consequence. Truck transport encountered different problems. To begin with, there were uncertainties regarding how transport will be managed at borders, which in the long run were not as stringent as feared. What was problematic in cases which are a large number of, nevertheless, was the availability of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings indicate that not many organizations had been well prepared for the corona crisis and in fact mostly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to create the supply chain for flexibility and agility. This appears especially challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was discovered that much more attention was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be provided to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in situations in which need cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to boost market shares wherein competitors miss opportunities. This task isn’t new, although it’s additionally been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is often unclear precisely how additional costs (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving seat 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 discussions between logistics and generation on the one hand and advertising on the other, the potential future must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?