Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been completely touched inside one way or yet another. One of the industries in which it was clearly apparent would be the agriculture as well as food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was clear to a lot of men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding in grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for that will the effect is less clear. It’s therefore vital that you figure out how well the food supply chain as a whole is actually prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand in retail up, in food service down It is apparent and widely known that need in the foodservice stations went down on account of the closure of joints, amongst others. In a few cases, sales for vendors in the food service business thus fell to aproximatelly 20 % of the original volume. As a complication, demand in the list channels went up and remained within a level of aproximatelly 10-20 % higher than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was required for wearing in consumer packaging. As much more of this packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a major affect on output activities. In certain instances, this even meant a complete stop in production (e.g. within the duck farming business, which came to a standstill due to demand fall out on the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited during the very first weeks of the problems, and costs which are high for container transport as a result. Truck transport faced different issues. At first, there were uncertainties on how transport would be managed for borders, which in the end weren’t as stringent as feared. That which was problematic in cases that are a large number of , nevertheless, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
Using this framework for the evaluation of the interview, the results indicate that not many companies were nicely prepared for the corona problems and actually mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This looks particularly complicated for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the potential to accomplish that.
Next, it was observed that much more interest was required on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing techniques in situations where demand cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but in addition to increase market shares in which competitors miss opportunities. This task is not new, but it has also been underexposed in this specific problems and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the economic effect of a crisis additionally relies on the way cooperation in the chain is set up. It’s typically unclear how further costs (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic considerations between creation and logistics on the one hand as well as advertising and marketing on the other, the potential future must explain to.
How is the Dutch foods supply chain coping during the corona crisis?