Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been affected and all industries have been completely touched in a way or perhaps yet another. One of the industries in which it was clearly apparent is the farming as well as food business.
Throughout 2019, the Dutch extension as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Though it was clear to majority of folks that there was a significant effect at the end of the chain (e.g., hoarding doing food markets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors within the supply chain for that the impact is less clear. It’s thus imperative that you determine how properly the food supply chain as a whole is actually equipped to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around thirty Dutch source chain actors.
Demand within retail up, that is found food service down It’s obvious and well known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In certain cases, sales for suppliers in the food service business thus fell to aproximatelly twenty % of the first volume. As a complication, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % higher than before the problems began.
Products that had to come from abroad had the own problems of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was required for use in buyer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a significant effect on production activities. In certain cases, this even meant the full stop in output (e.g. in the duck farming business, which came to a standstill due to demand fall-out inside the foodservice sector). In other instances, a major portion 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 start of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport capability during the first weeks of the problems, and expenses that are high for container transport as a result. Truck transport faced various problems. At first, there were uncertainties on how transport would be managed at borders, which in the end weren’t as rigid as feared. What was problematic in situations which are most, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the key things of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the conclusions show that not many businesses were nicely prepared for the corona problems and in reality mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility and agility. This appears especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the capacity to do it.
Next, it was found that much more attention was required on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in situations where demand cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to increase market shares where competitors miss opportunities. This challenge is not new, however, it’s in addition been underexposed in this specific problems and was usually not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic effect of a crisis in addition depends on the way cooperation in the chain is set up. It’s often unclear precisely how additional costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally switch the classic considerations between logistics and generation on the one hand and marketing and advertising on the other, the potential future will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?