Supply chain - The COVID 19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched in a way or perhaps another. Among the industries in which this was clearly obvious is the agriculture as well as food business.
Throughout 2019, the Dutch agriculture and food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover 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. Despite the fact that it was apparent to many people that there was a significant impact at the conclusion of this chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for that the impact is much less clear. It is thus important to find out how well the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, that is found food service down It's obvious 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 vendors in the food service industry as a result fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the retail channels went up and remained at a degree of about 10-20 % greater than before the crisis began.
Products that had to come through abroad had the own issues of theirs. With the change in need from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic was required for wearing in consumer packaging. As more of this particular packaging material ended up in consumers' homes as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a major affect on output activities. In certain instances, 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 on the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain - Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is restricted during the very first weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transportation experienced different issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the long run were not as rigid as feared. What was problematic in situations which are a large number of, however, was the availability of motorists.
The response to COVID-19 - provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the core components of supply chain resilience:
To us this framework for the evaluation of the interviews, the results indicate that not many companies had been nicely prepared for the corona crisis and actually mostly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to design the supply chain for versatility and agility. This looks particularly complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to do it.
Next, it was observed that more interest was needed on spreading risk as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be given to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases where need cannot be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to improve market shares where competitors miss opportunities. This particular challenge is not new, but it's additionally been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona crisis shows us that the monetary result of a crisis also is determined by the manner in which cooperation in the chain is set up. It is often unclear exactly how additional expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain functions 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 events. Whether the corona pandemic will structurally replace the classic discussions between logistics and generation on the one hand as well as advertising and marketing on the other hand, the future will have to tell.
How is the Dutch food supply chain coping during the corona crisis?