Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries have been touched within a way or perhaps some other. Among the industries in which this was clearly apparent will be the farming as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to a lot of men and women that there was a huge impact at the conclusion of the chain (e.g., hoarding doing food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that will the effect is less clear. It is therefore imperative that you find out how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need within retail up, in food service down It’s evident and well known that need in the foodservice stations went down due to the closure of places, amongst others. In some instances, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained within a level of about 10 20 % greater than before the problems began.
Products that had to come through abroad had the own problems of theirs. With the change in desire from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic was needed for use in customer packaging. As more of this packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a major effect on production activities. In a few instances, this even meant a total stop in production (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other cases, a major part 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 start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity that is limited during the first weeks of the problems, and costs which are high for container transport as a direct result. Truck travel encountered various problems. At first, there were uncertainties on how transport will be handled for borders, which in the long run were not as strict as feared. The thing that was problematic in situations which are most, however, was the availability of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the core elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings show that few businesses were nicely prepared for the corona problems and actually mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to create the supply chain for flexibility and agility. This seems especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the potential to accomplish that.
Second, it was discovered that much more interest was needed on spreading risk and also aiming for risk reduction in the supply chain. For the future, meaning far more attention should be provided to the way companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in situations where need cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to improve market shares wherein competitors miss options. This challenge isn’t new, although it has in addition been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows us that the economic result of a crisis in addition is determined by the way cooperation in the chain is actually set up. It’s typically unclear exactly how extra costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic considerations between logistics and creation on the one hand and marketing and advertising on the other, the future must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?