Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. health and Economic indicators have been affected and all industries are touched inside one way or even some other. Among the industries in which it was clearly noticeable would be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was apparent to many men and women that there was a huge effect at the end of this chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for that the impact is much less clear. It is therefore vital that you figure out how effectively the food supply chain as a whole is armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and 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 the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand in retail up, found food service down It is obvious and well known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In some cases, sales for vendors of the food service industry therefore fell to about 20 % of the initial volume. As a complication, demand in the list stations went up and remained within a level of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come via abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was needed for wearing in customer packaging. As more of this packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important impact on production activities. In some instances, this even meant a complete stop of production (e.g. in the duck farming business, which arrived to a standstill on account of demand fall out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capacity which is limited throughout the first weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transportation experienced different problems. Initially, there were uncertainties on how transport would be handled at borders, which in the long run weren’t as rigid as feared. That which was problematic in a large number of situations, nonetheless, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this key things of supply chain resilience:
To us this particular framework for the assessment of the interviews, the results show that not many companies were well prepared for the corona crisis and actually mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This seems especially challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the potential to accomplish that.
Next, it was found that more interest was required on spreading risk and aiming for risk reduction within the supply chain. For the future, this means far more attention should be given to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in situations where need can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but also to increase market shares in which competitors miss options. This task isn’t new, but it has in addition been underexposed in this crisis and was often not a component of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis also depends on the way cooperation in the chain is actually set up. It is often unclear precisely how further expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and creation on the one hand as well as marketing on the other hand, the potential future will need to tell.
How is the Dutch foods supply chain coping during the corona crisis?