Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been compromised and all industries have been touched in a way or perhaps some other. One of the industries in which it was clearly apparent would be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry 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 exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to many men and women that there was a significant impact at the end of the chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for which the effect is much less clear. It’s thus vital that you find out how effectively the food supply chain as being a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also 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 about thirty Dutch supply chain actors.
Demand in retail up, found food service down It is obvious and popular that need in the foodservice channels went down as a result of the closure of joints, amongst others. In a few cases, sales for suppliers of the food service industry therefore fell to about 20 % of the original volume. As a side effect, demand in the list channels went up and remained within a level of about 10 20 % greater than before the problems started.
Goods that had to come via abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic material was necessary for use in buyer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had an important impact on output activities. In some instances, this even meant a complete stop in production (e.g. within the duck farming industry, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is restricted throughout the very first weeks of the crisis, and high costs for container transport as a consequence. Truck transportation faced different problems. To begin with, there were uncertainties about how transport would be managed at borders, which in the end weren’t as strict as feared. That which was problematic in cases which are most, nevertheless, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this primary elements of supply chain resilience:
To us this framework for the evaluation of the interview, the findings indicate that not many businesses had been well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for flexibility as well as agility. This appears particularly challenging for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the potential to do it.
Next, it was observed that more attention was required on spreading threat and also aiming for risk reduction inside the supply chain. For the future, what this means is far more attention should be provided to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in cases in which need can’t be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to boost market shares where competitors miss opportunities. This challenge isn’t new, though it’s additionally been underexposed in this crisis 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 relies on the manner in which cooperation in the chain is actually set up. It is usually unclear exactly how further costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally replace the classic discussions between creation and logistics on the one hand and marketing on the other, the long term will have to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?