Supply chain – The COVID 19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been compromised and all industries are touched in one of the ways or even yet another. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch agriculture and 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 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 in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to most folks that there was a great effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the supply chain for that will the effect is less clear. It is thus imperative that you determine how properly the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Need within retail up, contained food service down It is evident and popular that demand in the foodservice stations went down due to the closure of joints, amongst others. In some cases, sales for suppliers of the food service industry thus fell to about 20 % of the initial volume. Being a side effect, demand in the retail stations went up and remained within a degree of about 10-20 % higher than before the problems started.
Products that had to come through abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic was required for wearing in customer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a significant impact on production activities. In certain instances, this even meant the full stop of output (e.g. within the duck farming business, which came to a standstill due to demand fall-out on the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity throughout the first weeks of the problems, and high expenses for container transport as a direct result. Truck transport encountered different problems. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in most situations, however, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this core elements of supply chain resilience:
Using this particular framework for the analysis of the interviews, the results show that not many businesses were well prepared for the corona crisis and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to develop the supply chain for versatility and agility. This seems particularly 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 capability to do so.
Second, it was discovered that more interest was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention has to be given to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is required to continue to satisfy market expectations but also to increase market shares wherein competitors miss opportunities. This task is not new, but it has additionally been underexposed in this crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the financial impact of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It’s typically unclear precisely how extra costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand as well as marketing on the other hand, the future must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?