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 completely touched within one way or perhaps some other. One of the industries in which it was clearly visible would be the farming and food industry.
Throughout 2019, the Dutch agriculture and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its 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 major consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to many people that there was a big effect at the tail end of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for which the impact is less clear. It is therefore important to figure out how well the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need in retail up, in food service down It is evident and widely known that need in the foodservice stations went down due to the closure of places, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to about twenty % of the first volume. Being a complication, demand in the retail channels went up and remained within a level of about 10 20 % higher than before the crisis started.
Goods that had to come from abroad had their very own issues. With the shift in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was required for use in buyer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant affect on output activities. In certain cases, this even meant a complete stop of output (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in limited transport capability during the earliest weeks of the problems, and costs that are high for container transport as a consequence. Truck transport faced various problems. Initially, there were uncertainties about how transport will be handled for borders, which in the long run were not as rigid as feared. That which was problematic in situations that are many , however, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the core elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the conclusions indicate that few organizations had been nicely prepared for the corona problems and in fact mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This looks especially challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do it.
Second, it was discovered that much more interest was required on spreading danger and aiming for risk reduction inside the supply chain. For the future, this means more attention ought to be provided to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing strategies in situations where need can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but also to boost market shares wherein competitors miss options. This task is not new, although it’s additionally been underexposed in this specific problems and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It is typically unclear precisely how further expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally replace the classic discussions between logistics and production on the one hand as well as advertising and marketing on the other, the future must explain to.
How is the Dutch food supply chain coping during the corona crisis?