Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. health and Economic indicators have been affected and all industries have been touched within one way or even another. Among the industries in which this was clearly noticeable will be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as many stakeholders are impacted. Even though it was clear to majority of folks that there was a huge effect at the conclusion of the chain (e.g., hoarding in grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that will the impact is much less clear. It’s therefore vital that you find out how properly the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also out of 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 analysis on interviews with around thirty Dutch source chain actors.
Need within retail up, in food service down It is apparent and popular that demand in the foodservice channels went down due to the closure of places, amongst others. In some instances, sales for suppliers of the food service business thus fell to about twenty % of the initial volume. Being an adverse reaction, demand in the list channels went up and remained at a degree of about 10 20 % higher than before the problems began.
Goods that had to come from abroad had the own issues of theirs. With the change in desire from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was required for use in buyer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a big affect on production activities. In some cases, this even meant a total stop in output (e.g. within the duck farming business, which came to a standstill on account of demand fall-out on the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), causing 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 transport capacity which is limited during the first weeks of the problems, and costs that are high for container transport as a result. Truck transportation faced various issues. To begin with, there were uncertainties on how transport will be managed for borders, which in the end were not as rigid as feared. That which was problematic in a large number of situations, however, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of this core elements of supply chain resilience:
To us this particular framework for the evaluation of the interview, the results indicate that not many businesses were well prepared for the corona crisis and actually mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the potential to accomplish that.
Next, it was discovered that more attention was required on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning more attention should be made available to the way companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in cases in which need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss opportunities. This particular task is not new, but it’s also been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial impact of a crisis also relies on the way cooperation in the chain is actually set up. It’s often unclear how further expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally change the classic considerations between logistics and generation on the one hand as well as marketing and advertising on the other, the potential future will have to explain to.
How’s the Dutch food supply chain coping during the corona crisis?