Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched inside one way or even some other. One of the industries in which it was clearly apparent will be the agriculture and food industry.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its 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 consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was apparent to most men and women that there was a great effect at the end of this chain (e.g., hoarding in food markets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors within the supply chain for which the impact is much less clear. It is therefore imperative that you find out how well the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Need in retail up, that is found food service down It’s evident and widely known that demand in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for vendors of the food service business as a result fell to about 20 % of the first volume. Being a complication, demand in the retail stations went up and remained at a degree of aproximatelly 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 demand for packaging improved considerably, More tin, cup or plastic material was needed for wearing in consumer packaging. As much more of this particular packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a significant effect on output activities. In a few cases, this even meant a full stop of output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capacity that is limited during the very first weeks of the crisis, and expenses which are high for container transport as a result. Truck transportation experienced different issues. At first, there were uncertainties about how transport would be managed at borders, which in the long run were not as rigid as feared. What was problematic in instances which are many, nonetheless, was the availability of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary elements of supply chain resilience:
To us this framework for the analysis of the interview, the findings indicate that not many companies were well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility as well as agility. This seems especially challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to do it.
Next, it was found that more interest was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, this means more attention has to be given to the way businesses count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in situations where need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but in addition to improve market shares where competitors miss options. This challenge isn’t new, though it has also been underexposed in this problems and was often not a component of preparatory activities.
Fourthly, the corona issues teaches us that the economic result of a crisis also relies on the manner in which cooperation in the chain is actually set up. It’s usually unclear how further costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the basic discussions between creation and logistics on the one hand as well as advertising on the other, the potential future must explain to.
How’s the Dutch foods supply chain coping during the corona crisis?