Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the planet. health and Economic indicators have been compromised and all industries have been completely touched inside a way or some other. Among the industries in which it was clearly apparent will be the agriculture and food industry.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per 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 enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was apparent to majority of folks that there was a significant effect at the end of the chain (e.g., hoarding doing grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for which the effect is less clear. It’s therefore imperative that you find out how well the food supply chain as being a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need within retail up, that is found food service down It’s evident and well known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the initial volume. Being a complication, demand in the retail channels went up and remained within a quality of about 10-20 % higher than before the problems began.
Goods that had to come via abroad had their own issues. With the change in need from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic was needed for use in buyer packaging. As more of this packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had an important affect on output activities. In a few cases, this even meant a full stop of output (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited throughout the earliest weeks of the issues, and expenses which are high for container transport as a consequence. Truck travel faced various problems. At first, there were uncertainties regarding how transport will be handled at borders, which in the end weren’t as strict as feared. The thing that was problematic in cases which are a large number of, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the key elements of supply chain resilience:
Using this particular framework for the analysis of the interview, the results show that not many companies were well prepared for the corona crisis and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This appears especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was discovered that more interest was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means more attention should be given to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is required to continue to meet market expectations but additionally to improve market shares wherein competitors miss opportunities. This challenge is not new, but it’s also been underexposed in this specific problems and was frequently not part of preparatory activities.
Fourthly, the corona crisis shows us that the financial result of a crisis also is determined by the way cooperation in the chain is set up. It is usually unclear precisely how further expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional considerations between logistics and creation on the one hand and advertising and marketing on the other, the future will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?