Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the world. health and Economic indicators have been affected and all industries are touched within one way or some other. One of the industries in which this was clearly visible will be the agriculture and food industry.
Throughout 2019, the Dutch extension as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was apparent to numerous people that there was a big impact at the tail end of the chain (e.g., hoarding around supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for which the effect is much less clear. It is thus vital that you figure out how effectively the food supply chain as a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand in retail up, found food service down It’s obvious and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few instances, sales for vendors in the food service industry therefore fell to aproximatelly twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained at a quality of aproximatelly 10 20 % greater than before the crisis began.
Goods that had to come via abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic material was necessary for wearing in buyer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant effect on output activities. In some instances, this even meant a complete stop in production (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out in the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability that is restricted throughout the very first weeks of the crisis, and costs that are high for container transport as a consequence. Truck transportation encountered various issues. To begin with, there were uncertainties regarding how transport will be managed for borders, which in the end were not as rigid as feared. What was problematic in many situations, nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this primary elements of supply chain resilience:
To us this framework for the analysis of the interviews, the results show that few organizations had been well prepared for the corona problems and in reality mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to accomplish that.
Next, it was discovered that more interest was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning more attention has to be made available to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing techniques in cases in which demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to increase market shares where competitors miss opportunities. This task is not new, though it has in addition been underexposed in this problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona issues shows us that the economic impact of a crisis also relies on the way cooperation in the chain is actually set up. It’s often unclear exactly how additional costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain features are in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally replace the traditional discussions between logistics and production on the one hand as well as marketing and advertising on the other, the long term must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?