Supply chain – The COVID-19 pandemic has certainly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched within one way or yet another. Among the industries in which this was clearly visible will be the agriculture and food business.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover 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 major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to most people that there was a huge impact at the conclusion of the chain (e.g., hoarding doing food markets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the source chain for that the impact is less clear. It is thus vital that you determine how properly the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about thirty Dutch supply chain actors.
Demand within retail up, that is found food service down It is apparent and popular that demand in the foodservice stations went down as a result of the closure of places, amongst others. In a few cases, sales for suppliers in the food service business thus fell to about 20 % of the original volume. As an adverse reaction, demand in the list stations went up and remained within a level of about 10 20 % greater than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the shift in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic was required for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important impact on output activities. In a few instances, this even meant a total stop of output (e.g. within the duck farming industry, which came to a standstill due to demand fall out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport capacity throughout the first weeks of the crisis, and costs which are high for container transport as a direct result. Truck transport faced different problems. At first, there were uncertainties about how transport would be handled at borders, which in the end weren’t as strict as feared. That which was problematic in most situations, nonetheless, was the availability of motorists.
The reaction to COVID 19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key things of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions show that not many organizations had been well prepared for the corona problems and in reality mainly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to design the supply chain for versatility as well as agility. This looks particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do it.
Second, it was discovered that more attention was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be made available to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in cases where demand cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but in addition to increase market shares wherein competitors miss opportunities. This task isn’t new, however, it’s additionally been underexposed in this specific problems and was usually not a part of preparatory activities.
Fourthly, the corona problems shows you us that the financial impact of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It’s often unclear how additional expenses (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain operates are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as marketing on the other, the long term will have to tell.
How’s the Dutch meal supply chain coping during the corona crisis?