Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its influence on the planet. health and Economic indicators have been affected and all industries have been completely touched in one way or perhaps some other. Among the industries in which this was clearly obvious would be the farming as well as food industry.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to a lot of folks that there was a great impact at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the source chain for which the impact is less clear. It’s therefore important to find out how effectively the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with around thirty Dutch source chain actors.
Demand within retail up, contained food service down It’s obvious and popular that demand in the foodservice stations went down on account of the closure of places, amongst others. In a few instances, sales for vendors in the food service industry therefore fell to about 20 % of the original volume. As a complication, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems started.
Products that had to come through abroad had their very own issues. With the shift in need coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was needed for use in customer packaging. As much more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important effect on production activities. In a few instances, this even meant a complete stop in output (e.g. in the duck farming industry, which came to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is restricted throughout the very first weeks of the issues, and costs which are high for container transport as a consequence. Truck transportation encountered various problems. At first, there were uncertainties about how transport will be managed for borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations which are a large number of, however, was the availability of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key elements of supply chain resilience:
To us this particular framework for the assessment of the interview, the findings indicate that few businesses had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This appears particularly challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the potential to do so.
Next, it was discovered that much more interest was necessary on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, this means more attention ought to be given to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations in which demand cannot 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 isn’t new, though it’s additionally been underexposed in this problems and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the financial effect of a crisis in addition relies on the manner in which cooperation in the chain is set up. It’s often unclear exactly how further expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand and marketing and advertising on the other, the potential future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?