Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been completely touched within one of the ways or yet another. One of the industries in which this was clearly visible would be the farming as well as food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to numerous folks that there was a huge impact at the tail end of the chain (e.g., hoarding around supermarkets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the supply chain for that will the effect is less clear. It’s therefore important to find out how properly the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based the examination of theirs on interviews with around 30 Dutch source chain actors.
Need within retail up, that is found food service down It’s apparent and widely known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In certain cases, sales for suppliers in the food service industry thus fell to about 20 % of the initial volume. As a complication, demand in the list channels went up and remained at a degree of about 10 20 % higher than before the crisis began.
Products that had to come from abroad had the own problems of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was needed for use in customer packaging. As more of this particular packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a major effect on output activities. In some instances, this even meant a complete stop of production (e.g. in the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted during the very first weeks of the crisis, and high costs for container transport as a result. Truck travel encountered different problems. To begin with, there were uncertainties about how transport would be managed at borders, which in the end weren’t as stringent as feared. What was problematic in many cases, nevertheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this core elements of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions indicate that not many companies were nicely prepared for the corona crisis and in reality mostly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This appears particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to do it.
Second, it was found that much more interest was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, this means far more attention should be provided to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in cases where need can’t be met. Explicit prioritization is required to keep on to meet market expectations but in addition to boost market shares in which competitors miss opportunities. This particular challenge is not new, however, it has also been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial result of a crisis also is determined by the way cooperation in the chain is actually set up. It is usually unclear exactly how additional expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand and advertising and marketing on the other, the long term must explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?