Supply chain – The COVID-19 pandemic has definitely had its impact influence on the planet. health and Economic indicators have been affected and all industries are touched within one way or perhaps another. One of the industries in which it was clearly obvious is the farming as well as food business.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry 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 their turnover 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 many individuals that there was a significant effect at the end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the source chain for that will the impact is much less clear. It is thus imperative that you find out how well the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as 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 their examination on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It is obvious and well known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In some instances, sales for vendors of the food service business thus fell to about twenty % of the original volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of about 10-20 % greater than before the crisis began.
Products which had to come through abroad had their very own issues. With the change in desire from foodservice to retail, the demand for packaging changed dramatically, More tin, glass or plastic material was needed for wearing in customer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a big affect on production activities. In some cases, this even meant a total stop in production (e.g. within the duck farming industry, which emerged to a standstill due to demand fall-out on the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted throughout the very first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck travel experienced various problems. At first, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as rigid as feared. That which was problematic in situations which are many, nevertheless, was the availability of drivers.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the core things of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions indicate that few companies had been well prepared for the corona problems and in reality mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility as well as versatility. This appears especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do so.
Next, it was found that more interest was necessary on spreading threat as well as aiming for risk reduction in the supply chain. For the future, this means far more attention has to be provided to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations in which need can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This challenge isn’t new, though it has additionally been underexposed in this crisis and was usually not part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial result of a crisis additionally depends on the way cooperation in the chain is actually set up. It is often unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional 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 events. Regardless of whether the corona pandemic will structurally replace the basic discussions between logistics and creation on the one hand and advertising on the other, the potential future must tell.
How is the Dutch foods supply chain coping during the corona crisis?