Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been completely touched within a way or perhaps another. One of the industries in which it was clearly noticeable will be the farming as well as food business.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to many people that there was a great impact at the tail end of the chain (e.g., hoarding in supermarkets, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for which the effect is much less clear. It is therefore vital that you determine how well the food supply chain as being a whole is prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food supply 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 obvious and widely known that need in the foodservice stations went down due to the closure of restaurants, amongst others. In a few cases, sales for suppliers of the food service business thus fell to aproximatelly 20 % of the initial volume. As a side effect, demand in the list channels went up and remained within a quality of about 10 20 % higher than before the crisis began.
Products which had to come via abroad had their own problems. With the shift in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was required for wearing in customer packaging. As more of this packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a major affect on output activities. In certain cases, this even meant a complete stop in output (e.g. within the duck farming industry, which came to a standstill as a result of demand fall out in the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is limited throughout the first weeks of the issues, and high expenses for container transport as a result. Truck transport faced various issues. Initially, there were uncertainties on how transport will be managed at borders, which in the end weren’t as rigid as feared. That which was problematic in most situations, nonetheless, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this main components of supply chain resilience:
To us this framework for the evaluation of the interview, the findings indicate that few businesses were nicely prepared for the corona crisis and actually mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to create the supply chain for versatility and agility. This appears especially complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the potential to accomplish that.
Next, it was observed that more attention was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, this means far more attention should be provided to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in cases where demand can’t be met. Explicit prioritization is actually necessary to keep on to meet market expectations but in addition to improve market shares where competitors miss options. This task isn’t new, though it has additionally been underexposed in this specific crisis and was often not a part of preparatory pursuits.
Fourthly, the corona problems shows us that the economic result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is often unclear exactly how further costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand and marketing on the other, the future must tell.
How is the Dutch foods supply chain coping during the corona crisis?