Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been compromised and all industries have been completely touched inside one of the ways or perhaps some other. One of the industries in which this was clearly obvious will be the agriculture and food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to most men and women that there was a big impact 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 searching for customers), you will find many actors inside the supply chain for that will the impact is less clear. It is thus imperative that you determine how well 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 as well as 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 around thirty Dutch source chain actors.
Need in retail up, in food service down It’s evident and widely known that need in the foodservice channels went down as a result of the closure of places, amongst others. In a few cases, sales for suppliers in the food service business thus fell to about 20 % of the first volume. As a complication, demand in the retail stations went up and remained within a degree of about 10 20 % higher than before the problems started.
Products which had to come from abroad had their own issues. With the change in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic material was required for wearing in customer packaging. As much more of this particular product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant effect on output activities. In certain cases, this even meant a full stop in output (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the crisis, and costs which are high for container transport as a direct result. Truck transport experienced various issues. Initially, there were uncertainties about how transport would be managed at borders, which in the end were not as strict as feared. The thing that was problematic in a large number of cases, however, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main components of supply chain resilience:
To us this framework for the analysis of the interviews, the findings indicate that not many companies were nicely prepared for the corona problems and in reality mainly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to design the supply chain for flexibility as well as agility. This seems particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to accomplish that.
Next, it was observed that more interest was necessary on spreading danger and aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be provided to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in situations where need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but also to boost market shares in which competitors miss options. This particular task isn’t new, but it’s additionally been underexposed in this crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona problems shows us that the economic impact of a crisis also depends on the manner in which cooperation in the chain is set up. It is usually unclear precisely how additional expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally change the classic considerations between creation and logistics on the one hand and advertising and marketing on the other, the long term will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?