Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched inside one way or yet another. Among the industries in which it was clearly apparent will be the agriculture as well as food business.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was apparent to a lot of folks that there was a huge effect at the tail end of this chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the supply chain for which the effect is much less clear. It’s thus vital that you figure out how properly the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with around thirty Dutch source chain actors.
Need in retail up, in food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service industry thus fell to about twenty % of the initial volume. Being an adverse reaction, demand in the list stations went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis started.
Products that had to come through abroad had their own issues. With the change in demand coming from foodservice to retail, the requirement for packaging changed considerably, More tin, glass or plastic was necessary for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a major affect on production activities. In certain cases, this even meant a full stop in output (e.g. inside the duck farming industry, which came to a standstill due to demand fall out in the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability that is limited throughout the very first weeks of the crisis, and expenses which are high for container transport as a direct result. Truck travel experienced different issues. Initially, there were uncertainties about how transport would be handled at borders, which in the long run were not as strict as feared. The thing that was problematic in cases that are most , nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the primary elements of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions show that few companies had been well prepared for the corona problems and actually mainly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This seems especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capacity to do it.
Second, it was found that more attention was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be made available to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases where need cannot be met. Explicit prioritization is actually needed to continue to satisfy market expectations but also to increase market shares wherein competitors miss options. This task isn’t new, although it has additionally been underexposed in this crisis and was often not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the economic result of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how extra expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally change the classic discussions between production and logistics on the one hand as well as advertising and marketing on the other, the future will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?