Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been touched inside one way or yet another. One of the industries in which this was clearly apparent would be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was clear to majority of folks that there was a significant impact at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors inside the source chain for that the impact is much less clear. It is thus important to figure out how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, that is found food service down It is apparent and widely known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In certain cases, sales for suppliers in the food service industry thus fell to aproximatelly 20 % of the original volume. Being a complication, demand in the retail stations went up and remained at a degree of about 10-20 % higher than before the problems began.
Products that had to come via abroad had their very own problems. With the shift in demand from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was necessary for wearing in customer packaging. As more of this particular product packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a significant impact on production activities. In some instances, this even meant a complete stop of production (e.g. in the duck farming industry, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability which is limited during the very first weeks of the issues, and expenses that are high for container transport as a direct result. Truck travel encountered various problems. Initially, there were uncertainties on how transport will be managed for borders, which in the long run were not as rigid as feared. The thing that was problematic in instances that are a large number of , however, 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 based on the overview of the core components of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions show that not many companies were nicely prepared for the corona crisis and in fact mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to develop the supply chain for agility and flexibility. This looks especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to do it.
Second, it was observed that much more interest was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be given to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing strategies in cases in which need cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but also to boost market shares where competitors miss opportunities. This challenge isn’t new, although it’s in addition been underexposed in this problems and was usually not part of preparatory pursuits.
Fourthly, the corona issues shows us that the financial effect of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is usually unclear precisely how further costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic discussions between production and logistics on the one hand as well as advertising on the other, the potential future will have to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?