Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. health and Economic indicators have been compromised and all industries are touched inside a way or perhaps another. One of the industries in which it was clearly visible would be the agriculture as well as food business.
Throughout 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to many individuals that there was a great impact at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the source chain for which the impact is less clear. It is therefore imperative that you figure out how effectively the food supply chain as a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for vendors in the food service business therefore fell to about twenty % of the first volume. Being an adverse reaction, demand in the list channels went up and remained within a degree of about 10 20 % greater than before the problems began.
Products which had to come via abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup and plastic was required for wearing in consumer packaging. As more of this product packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had an important effect on output activities. In a few cases, this even meant a complete stop in production (e.g. inside the duck farming industry, which came to a standstill on account of demand fall-out on the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits 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 transport capability that is limited during the very first weeks of the crisis, and costs that are high for container transport as a consequence. Truck travel encountered various problems. Initially, there were uncertainties on how transport would be handled for borders, which in the long run weren’t as rigid as feared. That which was problematic in situations that are a large number of , nonetheless, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of the main components of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that few organizations were well prepared for the corona problems and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to develop the supply chain for agility and flexibility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Next, it was found that much more interest was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, this means more attention should be made available to the way companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where demand cannot be met. Explicit prioritization is required to continue to meet market expectations but in addition to increase market shares where competitors miss options. This challenge is not new, although it has also been underexposed in this specific problems and was often not a component of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how further expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand as well as advertising on the other, the potential future must tell.
How’s the Dutch food supply chain coping during the corona crisis?