Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been touched within one way or another. Among the industries in which it was clearly noticeable will be the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant 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 men and women that there was a significant impact at the conclusion of this chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that will the impact is much less clear. It’s thus imperative that you determine how properly the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand within retail up, that is found food service down It’s apparent and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers in the food service business as a result fell to about 20 % of the original volume. As a side effect, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis started.
Goods 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, glass or plastic was necessary for wearing in customer packaging. As much more of this particular packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had an important effect on output activities. In some instances, this even meant a full stop of output (e.g. within the duck farming industry, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capability that is restricted throughout the first weeks of the crisis, and high expenses for container transport as a consequence. Truck transportation faced different problems. To begin with, there were uncertainties about how transport would be handled at borders, which in the long run were not as rigid as feared. The thing that was problematic in instances which are most, nonetheless, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the main elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings indicate that few companies had been well prepared for the corona crisis and in reality mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to design the supply chain for versatility and agility. This looks particularly complicated 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 capacity to accomplish that.
Next, it was found that more attention was necessary on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be given to the way companies rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing strategies in situations where need can’t be met. Explicit prioritization is needed to continue to meet market expectations but also to increase market shares in which competitors miss options. This particular challenge is not new, but it’s additionally been underexposed in this specific problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is typically unclear precisely how extra costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand and marketing on the other hand, the potential future must tell.
How is the Dutch foods supply chain coping during the corona crisis?