Supply chain – The COVID-19 pandemic has certainly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been touched in one of the ways or another. Among the industries in which this was clearly noticeable will be the agriculture as well as food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to numerous men and women that there was a huge impact at the conclusion of this chain (e.g., hoarding around supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for which the impact is less clear. It is thus important to figure out how properly the food supply chain as being a whole is prepared to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need within retail up, contained food service down It’s evident and popular that need in the foodservice channels went down as a result of the closure of places, amongst others. In certain cases, sales for suppliers in the food service business therefore fell to about twenty % of the original volume. As an adverse reaction, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the problems started.
Goods that had to come through abroad had the own issues of theirs. With the change in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was required for use in buyer packaging. As more of this particular product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a major effect on output activities. In a few instances, this even meant the full stop in output (e.g. in the duck farming industry, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other instances, a significant 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 of China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity which is restricted during the earliest weeks of the issues, and costs which are high for container transport as a result. Truck transportation encountered various issues. At first, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as rigid as feared. That which was problematic in many cases, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key components of supply chain resilience:
Using this framework for the assessment of the interviews, the conclusions show that not many companies had been nicely prepared for the corona crisis and in fact mostly applied responsive methods. The most notable supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the potential to do it.
Second, it was observed that more attention was necessary on spreading threat and also aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be given to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing techniques in cases in which demand cannot be met. Explicit prioritization is needed to continue to meet market expectations but also to increase market shares where competitors miss options. This task is not new, however, it’s additionally been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary result of a crisis also relies on the way cooperation in the chain is actually set up. It is typically unclear precisely how further costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand as well as advertising on the other hand, the long term will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?