Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been touched inside a way or even yet another. One of the industries in which it was clearly apparent would be the farming as well as food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to majority of men and women that there was a great effect at the end of the chain (e.g., hoarding in food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that the impact is much less clear. It’s therefore important to figure out how well the food supply chain as a whole is equipped to deal 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, studied the influences of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need in retail up, in food service down It’s obvious and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In some cases, sales for vendors in the food service industry as a result fell to about twenty % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained at a level of aproximatelly 10-20 % greater than before the problems started.
Products which had to come via abroad had their own issues. With the shift in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was needed for wearing in buyer packaging. As more of this product packaging material concluded up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a big impact on output activities. In some instances, this even meant the full stop of production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out on the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits 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 restricted transport capacity throughout the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck travel encountered various problems. Initially, there were uncertainties regarding how transport will be handled for borders, which in the long run were not as rigid as feared. The thing that was problematic in cases that are a large number of , nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this primary things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that not many businesses were nicely prepared for the corona problems and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
For starters, the need to create the supply chain for agility as well as flexibility. This seems particularly complicated 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 capacity to do it.
Next, it was found that more attention was necessary on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in situations in which demand cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but in addition to improve market shares where competitors miss options. This particular challenge is not new, however, it’s in addition been underexposed in this specific crisis and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic impact of a crisis additionally relies on the way cooperation in the chain is set up. It is often unclear precisely how extra 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 in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally switch the classic discussions between logistics and creation on the one hand as well as advertising and marketing on the other, the long term will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?