Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been affected and all industries are touched within one of the ways or perhaps some other. Among the industries in which it was clearly apparent would be the agriculture and food business.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was apparent to a lot of individuals that there was a great effect at the end of the chain (e.g., hoarding around supermarkets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for that the effect is less clear. It is therefore vital that you find out how properly the food supply chain as a whole is actually equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, found food service down It’s evident and well known that demand in the foodservice stations went down on account of the closure of places, amongst others. In some cases, sales for vendors in the food service industry thus fell to about 20 % of the first volume. Being an adverse reaction, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the problems began.
Products that had to come from abroad had their own problems. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic material was required for use in consumer packaging. As more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important impact on production activities. In some cases, this even meant a full stop of output (e.g. within the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport capability during the very first weeks of the crisis, and expenses which are high for container transport as a result. Truck transport encountered different issues. To begin with, there were uncertainties regarding how transport will be handled at borders, which in the end were not as rigid as feared. The thing that was problematic in many instances, nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the key components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions indicate that few companies had been nicely prepared for the corona crisis and in fact mostly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This seems particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capacity to do so.
Second, it was observed that much more attention was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is needed to continue to meet market expectations but in addition to increase market shares where competitors miss options. This particular challenge is not new, although it’s also been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial effect of a crisis also depends on the way cooperation in the chain is set up. It’s often unclear how additional costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand and marketing and advertising on the other, the future must explain to.
How is the Dutch foods supply chain coping during the corona crisis?