Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been completely touched within one way or perhaps some other. One of the industries in which this was clearly apparent will be the agriculture and food business.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are impacted. Though it was apparent to many individuals that there was a significant impact at the conclusion of this chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for that will the impact is much less clear. It is thus vital that you find out how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University 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 analysis of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It is evident and popular that demand in the foodservice stations went down due to the closure of joints, amongst others. In a few cases, sales for vendors of the food service industry therefore fell to about 20 % of the first volume. Being a complication, demand in the list stations went up and remained at a level of aproximatelly 10-20 % higher than before the problems started.
Goods that 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 dramatically, More tin, glass or plastic material was required for wearing in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a major impact on production activities. In some cases, this even meant a full stop in output (e.g. inside the duck farming business, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport electrical capacity throughout the very first weeks of the issues, and costs that are high for container transport as a result. Truck transport faced different problems. At first, there were uncertainties about how transport will be managed for borders, which in the long run weren’t as stringent as feared. What was problematic in most instances, nevertheless, was the availability of motorists.
The response 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 key things of supply chain resilience:
To us this framework for the assessment of the interview, the findings indicate that not many companies were nicely prepared for the corona crisis and in reality mostly 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 develop the supply chain for agility and flexibility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capability to do it.
Second, it was found that more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in situations where demand can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but in addition to increase market shares wherein competitors miss options. This challenge isn’t new, however, it has additionally been underexposed in this specific problems and was usually not a part of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary result of a crisis in addition depends on the way cooperation in the chain is actually set up. It’s usually unclear exactly how additional expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the traditional considerations between generation and logistics on the one hand as well as advertising on the other, the future will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?