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 one of the ways or perhaps some other. One of the industries in which it was clearly apparent is the agriculture and food industry.
Throughout 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was apparent to numerous men and women that there was a great effect at the end of this chain (e.g., hoarding in food markets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the source chain for which the impact is less clear. It’s thus imperative that you determine how effectively the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Need in retail up, contained food service down It is obvious and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the first volume. As a side effect, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % greater than before the crisis started.
Products which had to come through abroad had their very own issues. With the change in desire coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was required for wearing in buyer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important impact on output activities. In a few cases, this even meant a total stop in production (e.g. in the duck farming business, which emerged to a standstill on account of demand fall out on the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capability throughout the very first weeks of the issues, and expenses which are high for container transport as a result. Truck travel faced various problems. At first, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as strict as feared. What was problematic in cases that are a large number of , nonetheless, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the main things of supply chain resilience:
Using this framework for the evaluation of the interviews, the results indicate that not many businesses were nicely prepared for the corona problems and in reality mostly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This seems particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the potential to do so.
Second, it was observed that more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is more attention has to be provided to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations in which need can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but also to improve market shares where competitors miss opportunities. This task isn’t new, however, it has also been underexposed in this specific problems and was usually not a part of preparatory activities.
Fourthly, the corona issues shows you us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how extra expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the classic considerations between generation and logistics on the one hand as well as marketing on the other hand, the potential future will have to tell.
How’s the Dutch food supply chain coping during the corona crisis?