Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or perhaps some other. One of the industries in which this was clearly obvious would be the farming as well as food industry.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was clear to many folks that there was a big impact at the tail end of the chain (e.g., hoarding in food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the supply chain for that the impact is less clear. It is thus important to find out how effectively the food supply chain as being a whole is armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Demand within retail up, in food service down It’s evident and widely known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In certain cases, sales for vendors of the food service business as a result fell to about twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained within a quality of about 10-20 % higher than before the problems started.
Products that had to come from abroad had the own issues of theirs. With the change in need from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was needed for wearing in customer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a significant affect on output activities. In certain cases, this even meant a total stop in output (e.g. inside the duck farming industry, which emerged to a standstill due to demand fall-out inside the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the issues, and costs which are high for container transport as a consequence. Truck transportation faced different issues. To begin with, there were uncertainties about how transport will be managed at borders, which in the long run were not as strict as feared. What was problematic in a large number of cases, nonetheless, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this core components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions indicate that few organizations had been well prepared for the corona crisis and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for versatility and agility. This looks especially challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to do so.
Second, it was found that much more interest was necessary on spreading risk and aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be provided to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but in addition to boost market shares where competitors miss options. This particular task isn’t new, however, it’s also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary effect of a crisis also is determined by the way cooperation in the chain is set up. It is typically unclear how extra expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are in the driving seat during a crisis. Product development and advertising activities have to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally change the basic discussions between creation and logistics on the one hand as well as advertising and marketing on the other, the future will need to tell.
How is the Dutch food supply chain coping during the corona crisis?