Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been affected and all industries are touched in one way or even another. Among the industries in which it was clearly visible will be the agriculture as well as food business.
In 2019, the Dutch agriculture as well as food niche 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 in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to many men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that will the effect is less clear. It’s thus imperative that you determine how well the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In certain cases, sales for suppliers in the food service industry therefore fell to aproximatelly twenty % of the original volume. As a complication, demand in the list stations went up and remained at a degree of aproximatelly 10 20 % greater than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was needed for wearing in buyer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a major impact on production activities. In a few instances, this even meant a total stop of production (e.g. in the duck farming business, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability that is restricted throughout the first weeks of the crisis, and high costs for container transport as a consequence. Truck transport faced various problems. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the end were not as strict as feared. The thing that was problematic in instances which are many, nevertheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key things of supply chain resilience:
Using this framework for the analysis of the interviews, the findings show that not many organizations were well prepared for the corona crisis and in fact mostly applied responsive practices. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This looks especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to do it.
Second, it was found that much more interest was needed on spreading danger and aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be made available to the way companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing strategies in cases in which demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to improve market shares in which competitors miss opportunities. This particular task is not new, though it’s in addition been underexposed in this problems and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows us that the financial impact of a crisis additionally relies on the manner in which cooperation in the chain is set up. It is often unclear precisely how extra costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally change the traditional considerations between logistics and production on the one hand as well as marketing on the other, the long term will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?