Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been compromised and all industries are touched in a way or some other. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 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 enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Even though it was clear to most people that there was a big impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the supply chain for which the impact is less clear. It’s thus vital that you find out how properly the food supply chain as being a whole is armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need in retail up, that is found food service down It’s apparent and well known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In some cases, sales for suppliers in the food service business thus fell to aproximatelly 20 % of the first volume. As a complication, demand in the list channels went up and remained within a degree of about 10 20 % greater than before the problems started.
Goods that had to come through abroad had their very own issues. With the change in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic was required for use in customer packaging. As more of this packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In some cases, this even meant a total stop in production (e.g. inside the duck farming business, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other instances, a significant part 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 beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity which is limited throughout the first weeks of the issues, and expenses that are high for container transport as a direct result. Truck transportation encountered different issues. To begin with, there were uncertainties about how transport will be managed at borders, which in the long run weren’t as strict as feared. The thing that was problematic in a large number of cases, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the main things of supply chain resilience:
Using this particular framework for the evaluation of the interview, the findings indicate that not many companies had been nicely prepared for the corona problems and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to create the supply chain for agility and versatility. This seems particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the potential to do so.
Next, it was observed that much more interest was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means more attention should be made available to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in cases where demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but additionally to increase market shares wherein competitors miss options. This particular challenge isn’t new, though it’s additionally been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems teaches us that the monetary effect of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It’s often unclear how further expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain works are in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the classic discussions between logistics and creation on the one hand as well as marketing on the other, the potential future must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?