Supply chain – The COVID-19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been affected and all industries are touched within a way or even some other. Among the industries in which it was clearly apparent is the agriculture and food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was apparent to most individuals that there was a huge effect at the conclusion of the chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the supply chain for that will the effect is much less clear. It’s thus vital that you find out how properly the food supply chain as a whole is actually armed to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also 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 the examination of theirs on interviews with about thirty Dutch supply chain actors.
Need in retail up, in food service down It’s evident and popular that need in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for suppliers in the food service industry thus fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % higher than before the crisis started.
Goods that had to come from abroad had their own issues. With the shift in need from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic material was required for use in consumer packaging. As much more of this packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had an important effect on output activities. In a few instances, this even meant the full stop of production (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out on the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down pretty soon in 2020. This resulted in limited transport capacity throughout the earliest weeks of the problems, and costs which are high for container transport as a consequence. Truck transport faced various problems. At first, there were uncertainties about how transport will be handled at borders, which in the long run were not as strict as feared. What was problematic in situations which are most, nonetheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this core elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the conclusions show that few businesses were well prepared for the corona problems and actually mainly applied responsive practices. The most important supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to create the supply chain for versatility as well as agility. This seems particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to do it.
Second, it was discovered that more interest was needed on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing strategies in situations where demand can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This particular challenge isn’t new, though it has additionally been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial result of a crisis also depends on the way cooperation in the chain is set up. It is typically unclear precisely how additional costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally replace the classic considerations between logistics and production on the one hand and marketing and advertising on the other, the future will need to tell.
How is the Dutch foods supply chain coping during the corona crisis?