Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. Economic indicators and health have been affected and all industries are touched in one of the ways or even some other. One of the industries in which this was clearly noticeable would be the farming as well as food business.
In 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to majority of individuals that there was a great impact at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the supply chain for that will the effect is less clear. It’s therefore vital that you figure out how effectively the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, in food service down It’s evident and well known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In a few cases, sales for vendors in the food service business thus fell to aproximatelly twenty % of the first volume. As a complication, demand in the retail stations went up and remained within a degree of about 10-20 % greater than before the problems started.
Goods that had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic was needed for wearing in buyer packaging. As more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a significant effect on production activities. In a few cases, this even meant a total stop of output (e.g. inside the duck farming industry, which emerged to a standstill as a result of demand fall out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity which is restricted during the first weeks of the issues, and costs that are high for container transport as a result. Truck travel encountered various problems. To begin with, there were uncertainties on how transport will be handled at borders, which in the end were not as strict as feared. What was problematic in many cases, nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the core elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that not many companies had been well prepared for the corona crisis and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility and agility. This looks particularly challenging for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the potential to accomplish that.
Second, it was found that more attention was necessary on spreading threat and aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be provided to the way businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in situations where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to improve market shares where competitors miss options. This task isn’t new, though it’s also been underexposed in this specific problems and was frequently not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic impact of a crisis also relies on the way cooperation in the chain is set up. It is often unclear how additional costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the traditional considerations between generation and logistics on the one hand and advertising and marketing on the other, the long term will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?