Supply chain – The COVID-19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been affected and all industries are touched inside a way or even yet another. Among the industries in which this was clearly noticeable would be the farming as well as food business.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to majority of men and women that there was a huge impact at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that the effect is much less clear. It’s thus important to figure out how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, found food service down It is apparent and widely known that need in the foodservice stations went down due to the closure of joints, amongst others. In a few cases, sales for suppliers of the food service business thus fell to aproximatelly twenty % of the first volume. As a complication, demand in the retail stations went up and remained at a level of about 10 20 % greater than before the problems began.
Goods that had to come through abroad had their own issues. With the shift in demand from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic material was necessary for use in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had an important impact on production activities. In a few instances, this even meant a complete stop in production (e.g. in the duck farming business, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in restricted transport capacity during the earliest weeks of the problems, and high expenses for container transport as a consequence. Truck transportation faced various problems. To begin with, there were uncertainties on how transport will be managed at borders, which in the long run were not as stringent as feared. The thing that was problematic in instances that are many , nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the core things of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions show that not many companies were well prepared for the corona crisis and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This seems especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capacity to do it.
Second, it was observed that much more interest was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means far more attention has to be made available to the way businesses depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in situations where need can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This particular challenge isn’t new, although it has also been underexposed in this specific crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic impact of a crisis in addition relies on the way cooperation in the chain is actually set up. It is often unclear exactly how further expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and generation on the one hand and marketing on the other hand, the potential future must tell.
How is the Dutch food supply chain coping during the corona crisis?