Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched in one of the ways or even yet another. One of the industries in which it was clearly obvious is the agriculture as well as food business.
In 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased 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 impacted. Even though it was apparent to most folks that there was a significant impact at the tail end of this chain (e.g., hoarding doing supermarkets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for which the effect is much less clear. It’s therefore imperative that you find out how properly the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand in retail up, found food service down It is apparent and well known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In some cases, sales for suppliers in the food service industry thus fell to about 20 % of the original volume. Being a complication, demand in the list channels went up and remained within a degree of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come via abroad had their own issues. With the shift in need from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic was necessary for wearing in buyer packaging. As more of this particular product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a big impact on output activities. In a few cases, this even meant a total stop in output (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the problems, and high costs for container transport as a direct result. Truck transportation encountered different problems. At first, there were uncertainties on how transport would be handled at borders, which in the long run weren’t as strict as feared. That which was problematic in cases which are many, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key things of supply chain resilience:
To us this framework for the evaluation of the interview, the conclusions indicate that few organizations had been nicely prepared for the corona crisis and in fact mostly applied responsive methods. The most notable supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This appears especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to do so.
Next, it was discovered that more attention was necessary on spreading danger and aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be given to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in situations where need cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to improve market shares where competitors miss options. This particular task isn’t new, although it has additionally been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary impact of a crisis additionally relies on the way cooperation in the chain is set up. It’s usually unclear how additional costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain features are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the classic discussions between logistics and generation on the one hand as well as marketing and advertising on the other, the potential future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?