Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been completely touched inside one way or perhaps yet another. Among the industries in which it was clearly apparent would be the agriculture and food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was clear to most people that there was a significant effect at the conclusion of the chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for that will the effect is much less clear. It’s thus imperative that you determine how well the food supply chain as being a whole is prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand within retail up, that is found food service down It is apparent and widely known that need in the foodservice stations went down on account of the closure of places, amongst others. In some instances, sales for vendors in the food service industry therefore fell to about 20 % of the initial volume. Being a side effect, demand in the retail stations went up and remained within a quality of about 10-20 % greater than before the crisis started.
Goods that had to come via abroad had the own issues of theirs. With the change in desire from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic was necessary for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant affect on production activities. In certain cases, this even meant a total stop of production (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits 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 during the first weeks of the crisis, and costs that are high for container transport as a result. Truck transportation encountered various issues. Initially, there were uncertainties on how transport would be handled for borders, which in the end were not as rigid as feared. That which was problematic in situations which are many, however, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this key components of supply chain resilience:
To us this framework for the evaluation of the interviews, the results indicate that not many companies were well prepared for the corona problems and actually mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to design the supply chain for agility and flexibility. This appears especially challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Second, it was discovered that much more interest was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be given to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in situations where demand can’t be met. Explicit prioritization is actually necessary to keep on to meet market expectations but additionally to increase market shares where competitors miss opportunities. This particular task is not new, but it has additionally been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial effect of a crisis also depends on the way cooperation in the chain is actually set up. It is usually unclear precisely how further expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the classic discussions between logistics and creation on the one hand and marketing on the other, the potential future will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?