Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. health and Economic indicators have been affected and all industries are touched in a way or even some other. Among the industries in which it was clearly visible is the agriculture and food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover 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 major effects for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to majority of individuals that there was a big effect at the end of the chain (e.g., hoarding around food markets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the source chain for which the effect is much less clear. It is thus important to determine how properly the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, found food service down It is obvious and well known that need in the foodservice stations went down due to the closure of places, amongst others. In certain instances, sales for suppliers of the food service business therefore fell to about 20 % of the first volume. As a side effect, demand in the retail stations went up and remained at a level of about 10 20 % higher than before the crisis started.
Goods that had to come via abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was required for use in buyer packaging. As more of this particular product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a big impact on production activities. In a few instances, this even meant the full stop in output (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 major part of the personnel contracted corona (e.g. in the meat 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 restricted throughout the earliest weeks of the problems, and costs that are high for container transport as a direct result. Truck travel experienced various problems. To begin with, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in instances which are a large number of, however, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main elements of supply chain resilience:
To us this particular framework for the assessment of the interview, the findings indicate that not many companies had been well prepared for the corona crisis and actually mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
For starters, the need to develop the supply chain for agility as well as versatility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was found that much more interest was required on spreading risk and also aiming for risk reduction inside the supply chain. For the future, this means far more attention should be given to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing strategies in cases in which demand can’t be met. Explicit prioritization is actually needed to continue to meet market expectations but also to boost market shares in which competitors miss options. This task isn’t new, though it’s in addition been underexposed in this crisis and was usually not a component of preparatory activities.
Fourthly, the corona issues shows you us that the financial result of a crisis also is determined by the manner in which cooperation in the chain is set up. It is usually unclear precisely how extra costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the classic discussions between logistics and generation on the one hand as well as advertising and marketing on the other, the potential future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?