Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been affected and all industries are touched inside one way or even another. Among the industries in which it was clearly noticeable would be the farming and food business.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was clear to a lot of people that there was a huge effect at the end of this chain (e.g., hoarding doing food markets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for which the impact is much less clear. It is thus vital that you find out how well the food supply chain as a whole is prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand in retail up, that is found food service down It is obvious and widely known that need in the foodservice stations went down on account of the closure of joints, amongst others. In certain cases, sales for vendors of the food service business thus fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the list stations went up and remained at a quality of about 10-20 % greater than before the crisis started.
Products that had to come via abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was required for use in consumer packaging. As much more of this particular packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a significant affect on production activities. In a few instances, this even meant a total stop of production (e.g. in the duck farming business, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability that is limited during the first weeks of the crisis, and high expenses for container transport as a consequence. Truck transport encountered various problems. Initially, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as strict as feared. The thing that was problematic in many situations, nevertheless, was the availability of motorists.
The reaction to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this key components of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings show that not many organizations had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for versatility as well as agility. This appears especially complicated for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the potential to do it.
Second, it was found that much more interest was required on spreading risk and also aiming for risk reduction in the supply chain. For the future, meaning more attention has to be given to the way companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing strategies in cases in which demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but also to improve market shares in which competitors miss options. This particular challenge isn’t new, although it has also been underexposed in this crisis and was often not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary impact of a crisis additionally relies on the way cooperation in the chain is set up. It’s typically unclear exactly how additional costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain features are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally change the classic considerations between logistics and generation on the one hand and marketing on the other hand, the potential future will have to tell.
How’s the Dutch food supply chain coping during the corona crisis?