Supply chain - The COVID-19 pandemic has definitely had its impact effect on the world. Economic indicators and health have been compromised and all industries have been completely touched inside a way or perhaps some other. One of the industries in which this was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch extension as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to a lot of folks that there was a big effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for which the impact is much less clear. It's therefore imperative that you figure out how effectively the food supply chain as a whole is equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need in retail up, contained food service down It is evident and well known that need in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the initial volume. Being a complication, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems started.
Products that had to come via abroad had their very own problems. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic was necessary for use in buyer packaging. As much more of this product packaging material ended up in consumers' houses as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a major affect on production activities. In a few cases, this even meant the full stop in production (e.g. in the duck farming industry, which came to a standstill on account of demand fall out in the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain - Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability which is restricted during the earliest weeks of the issues, and expenses that are high for container transport as a consequence. Truck travel experienced various issues. Initially, there were uncertainties about how transport would be managed for borders, which in the long run weren't as stringent as feared. That which was problematic in situations that are a large number of , nonetheless, was the availability of motorists.
The response to COVID-19 - supply chain resilience The source 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 particular framework for the evaluation of the interviews, the results indicate that not many businesses had been nicely prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This looks especially complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to accomplish that.
Second, it was found that more attention was needed on spreading threat and aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be given to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations in which demand can't be met. Explicit prioritization is needed to continue to meet market expectations but also to increase market shares where competitors miss options. This task isn't new, but it's in addition been underexposed in this crisis and was often not part of preparatory activities.
Fourthly, the corona issues shows us that the economic impact of a crisis in addition is determined by the manner in which cooperation in the chain is set up. It is often unclear precisely how further expenses (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the classic considerations between logistics and generation on the one hand and advertising and marketing on the other hand, the potential future will have to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?