Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries have been completely touched within one way or yet another. Among the industries in which this was clearly obvious would be the agriculture as well as food business.
Throughout 2019, the Dutch farming and food sector 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 in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of individuals that there was a huge impact at the tail end of this chain (e.g., hoarding around supermarkets, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the source chain for that will the effect is less clear. It’s thus imperative that you find out how properly the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand within retail up, contained food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In some cases, sales for vendors in the food service industry thus fell to about twenty % of the initial volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of about 10-20 % higher than before the crisis started.
Products that had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic was required for use in buyer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In certain cases, this even meant the full stop in output (e.g. within the duck farming business, which came to a standstill due to demand fall out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability which is limited during the very first weeks of the issues, and costs which are high for container transport as a direct result. Truck transport experienced various problems. To begin with, there were uncertainties on how transport will be managed at borders, which in the long run weren’t as strict as feared. What was problematic in instances that are a large number of , however, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this primary components of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions indicate that few organizations had been well prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This seems especially complicated for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capability to do so.
Next, it was discovered that much more interest was necessary on spreading risk and aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be provided to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing strategies in situations in which need can’t be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but additionally to increase market shares in which competitors miss options. This particular challenge is not new, although it’s additionally been underexposed in this problems and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary effect of a crisis also is determined by the manner in which cooperation in the chain is set up. It is usually unclear precisely how additional costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally replace the basic discussions between logistics and generation on the one hand as well as marketing on the other hand, the long term will need to explain to.
How is the Dutch foods supply chain coping during the corona crisis?