How is the Dutch foods supply chain coping during the corona crisis?
Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been touched within one of the ways or perhaps some other. One of the industries in which this was clearly obvious is the agriculture and food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 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 in the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was apparent to numerous individuals that there was a big impact at the end of the chain (e.g., hoarding in supermarkets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for which the effect is much less clear. It’s therefore imperative that you find out how effectively the food supply chain as a whole is armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Need within retail up, in food service down It’s evident and widely known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to about 20 % of the initial volume. As an adverse reaction, demand in the retail channels went up and remained within a level of aproximatelly 10 20 % higher than before the problems started.
Goods that had to come through abroad had their own issues. With the shift in demand coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic material was necessary for use in buyer packaging. As more of this particular product packaging material concluded up in consumers’ homes as opposed to in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in need have had a major affect on output activities. In certain instances, this even meant a full stop of output (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted during the very first weeks of the problems, and costs that are high for container transport as a direct result. Truck travel faced various issues. At first, there were uncertainties on how transport would be handled at borders, which in the long run were not as rigid as feared. That which was problematic in many cases, however, was the availability of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this key things of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings indicate that few companies had been nicely prepared for the corona problems and in fact mostly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to design the supply chain for versatility and agility. This appears especially complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do it.
Second, it was discovered that much more interest was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, this means 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 as well as clever rationing strategies in cases in which need can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss options. This challenge isn’t new, though it has additionally been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic effect of a crisis also relies on the manner in which cooperation in the chain is set up. It is usually unclear precisely how extra expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the traditional discussions between logistics and creation on the one hand as well as marketing and advertising on the other hand, the long term must tell.
How is the Dutch meal supply chain coping during the corona crisis?