Supply chain – The COVID-19 pandemic has definitely had its impact effect on the planet. Economic indicators and health have been compromised and all industries are touched within a way or perhaps another. One of the industries in which it was clearly visible would be the farming as well as food industry.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade 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 of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to a lot of individuals that there was a great effect at the end of this chain (e.g., hoarding doing food markets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for which the effect is less clear. It is thus important to determine how properly the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s apparent and popular that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In some instances, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the original volume. As an adverse reaction, demand in the retail channels went up and remained within a level of about 10 20 % higher than before the crisis started.
Goods that had to come through abroad had their own problems. With the change in demand coming from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic material was needed for use in consumer packaging. As much more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had an important affect on output activities. In certain instances, this even meant the full stop in production (e.g. in the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability that is restricted throughout the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck transportation encountered different issues. At first, there were uncertainties on how transport will be handled at borders, which in the long run were not as rigid as feared. What was problematic in instances which are most, nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this primary components of supply chain resilience:
Using this particular framework for the analysis of the interview, the results indicate that not many businesses were nicely prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This looks particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to do it.
Next, it was found that much more attention was needed on spreading danger and also aiming for risk reduction in the supply chain. For the future, this means far more attention has to be provided to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but also to improve market shares in which competitors miss options. This particular challenge isn’t new, however, it has also been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona issues shows you us that the economic impact of a crisis additionally relies on the way cooperation in the chain is actually set up. It’s typically unclear precisely how further expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional discussions between logistics and creation on the one hand and advertising and marketing on the other hand, the long term will need to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?