Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. health and Economic indicators have been compromised and all industries are touched in one of the ways or perhaps another. Among the industries in which this was clearly noticeable will be the farming as well as food industry.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical 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 many stakeholders are affected. Even though it was apparent to most men and women that there was a significant effect at the end of the chain (e.g., hoarding in supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors inside the source chain for which the effect is less clear. It’s therefore vital that you determine how well the food supply chain as a whole is actually armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also 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 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s apparent and widely known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In some instances, sales for suppliers in the food service industry as a result fell to aproximatelly 20 % of the first volume. As a side effect, demand in the retail stations went up and remained within a degree of about 10-20 % higher than before the problems began.
Products that had to come via abroad had their own problems. With the change in desire from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic material was necessary for wearing in consumer packaging. As more of this particular packaging material ended up in consumers’ homes instead of in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a major effect on production activities. In a few cases, this even meant the full stop in output (e.g. inside the duck farming business, which emerged to a standstill on account of demand fall-out in the foodservice sector). In other instances, a big section 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 containers to slow down fairly shortly in 2020. This resulted in transport capability that is limited during the first weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transportation faced various issues. At first, there were uncertainties about how transport will be managed at borders, which in the end weren’t as rigid as feared. That which was problematic in situations that are most , nevertheless, was the availability of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the main things of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that not many companies were well prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
First, the need to design the supply chain for agility as well as flexibility. This seems especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to accomplish that.
Second, it was discovered that more interest was required on spreading threat and aiming for risk reduction within the supply chain. For the future, this means more attention ought to be provided to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing strategies in cases where demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but in addition to boost market shares wherein competitors miss opportunities. This particular task is not new, but it has additionally been underexposed in this specific crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial result of a crisis in addition depends on the way cooperation in the chain is set up. It’s often unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain features are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic considerations between logistics and generation on the one hand as well as advertising on the other hand, the future must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?