Supply chain – The COVID 19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been compromised and all industries have been completely touched in one way or perhaps some other. One of the industries in which this was clearly visible is the agriculture and food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry 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 of the food chain have big effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to many individuals that there was a huge effect at the tail end of this chain (e.g., hoarding in supermarkets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the source chain for which the impact is less clear. It’s thus important to find out how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research as well as 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 all over the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, contained food service down It is evident and popular that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few instances, sales for suppliers of the food service business therefore fell to about twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained at a level of about 10-20 % higher than before the crisis began.
Products that had to come via abroad had the own issues of theirs. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic material was necessary for wearing in customer packaging. As much more of this particular product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant effect on output activities. In some cases, this even meant a complete stop in output (e.g. in the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in restricted transport capacity throughout the earliest weeks of the issues, and costs that are high for container transport as a result. Truck transport faced different issues. Initially, there were uncertainties on how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in cases which are many, nonetheless, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this core things of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions show that few companies had been nicely prepared for the corona problems and actually mostly applied responsive practices. The most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to design the supply chain for versatility as well as agility. This appears especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to do it.
Next, it was discovered that more attention was required on spreading risk and aiming for risk reduction in the supply chain. For the future, meaning far more attention should be made available to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in situations where need cannot be met. Explicit prioritization is needed to continue to meet market expectations but additionally to improve market shares where competitors miss options. This task isn’t new, although it’s in addition been underexposed in this crisis and was usually not part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the financial impact of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It’s often unclear precisely how additional expenses (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the basic discussions between creation and logistics on the one hand as well as advertising on the other, the long term will have to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?