Supply chain – The COVID-19 pandemic has definitely had its impact influence on the world. health and Economic indicators have been compromised and all industries have been touched within one of the ways or another. One of the industries in which this was clearly apparent would be the farming as well as food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 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 big consequences for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many individuals that there was a big impact at the tail end of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the source chain for that will the effect is less clear. It is therefore imperative that you find out how effectively the food supply chain as a whole is actually armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Demand within retail up, in food service down It is obvious and popular that demand in the foodservice stations went down on account of the closure of places, amongst others. In some cases, sales for vendors in the food service business thus fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a degree of aproximatelly 10 20 % higher than before the problems started.
Products which had to come via abroad had their own problems. With the shift in demand coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was needed for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had an important affect on output activities. In a few instances, this even meant a total stop of output (e.g. inside the duck farming business, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the crisis, and costs that are high for container transport as a direct result. Truck travel encountered different issues. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run were not as rigid as feared. What was problematic in instances which are many, however, was the availability of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this key things of supply chain resilience:
Using this framework for the assessment of the interviews, the findings indicate that few organizations had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capability to do so.
Second, it was observed that more attention was required on spreading risk and aiming for risk reduction in the supply chain. For the future, meaning 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 and smart rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to increase market shares where competitors miss opportunities. This task isn’t new, though it’s also been underexposed in this crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial effect of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is typically unclear how additional costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally switch the classic discussions between creation and logistics on the one hand and marketing on the other hand, the long term will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?