Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries are touched in a way or perhaps some other. One of the industries in which it was clearly noticeable will be the agriculture and food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry 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 in the food chain have major effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was clear to many men and women that there was a great effect at the conclusion of this chain (e.g., hoarding around supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that will the effect is less clear. It is therefore vital that you figure out how effectively the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food resources chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, in food service down It is apparent and popular that need in the foodservice channels went down due to the closure of places, amongst others. In certain cases, sales for vendors of the food service industry as a result fell to aproximatelly twenty % of the first volume. As a side effect, demand in the list channels went up and remained at a degree of about 10-20 % higher than before the crisis started.
Products which 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 use in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a big impact on output activities. In a few instances, this even meant a total stop of production (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out on the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in limited transport capacity throughout the first weeks of the issues, and costs that are high for container transport as a direct result. Truck travel experienced different problems. Initially, there were uncertainties on how transport will be handled at borders, which in the end were not as stringent as feared. What was problematic in most cases, however, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of the core components of supply chain resilience:
Using this particular framework for the assessment of the interview, the conclusions show that not many organizations were well prepared for the corona crisis and in reality mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to create the supply chain for versatility and agility. This seems particularly challenging for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capability to accomplish that.
Second, it was discovered that much more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be given to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is actually needed to continue to meet market expectations but in addition to increase market shares where competitors miss opportunities. This particular challenge is not new, but it’s also been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It’s usually unclear precisely how additional expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and creation on the one hand and marketing and advertising on the other hand, the long term will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?