Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. health and Economic indicators have been compromised and all industries have been completely touched inside one way or even yet another. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business 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 exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as many stakeholders are impacted. Though it was apparent to majority of folks that there was a significant impact at the conclusion of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find many actors in the supply chain for that the impact is much less clear. It’s therefore vital that you determine how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, in food service down It’s apparent and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service business as a result fell to about 20 % of the first volume. As an adverse reaction, demand in the list channels went up and remained at a degree of about 10 20 % higher than before the crisis began.
Products that had to come from abroad had their very own issues. With the shift in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic was necessary for wearing in consumer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a significant impact on production activities. In certain instances, this even meant the full stop in output (e.g. inside the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in limited transport capacity during the first weeks of the crisis, and costs that are high for container transport as a consequence. Truck travel faced various issues. Initially, there were uncertainties about how transport would be managed for borders, which in the long run were not as stringent as feared. The thing that was problematic in a large number of cases, nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the main elements of supply chain resilience:
Using this framework for the evaluation of the interview, the results indicate that not many organizations had been nicely prepared for the corona crisis and actually mostly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to design the supply chain for agility as well as versatility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capacity to do so.
Next, it was found that much more interest was required on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning more attention has to be made available to the way businesses depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases where demand cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but in addition to increase market shares wherein competitors miss options. This particular task is not new, however, it has in addition been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the financial effect of a crisis also relies on the manner in which cooperation in the chain is set up. It’s often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally switch the basic discussions between logistics and production on the one hand as well as marketing and advertising on the other hand, the long term will need to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?