Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been affected and all industries are touched inside one way or perhaps another. Among the industries in which it was clearly obvious is the farming and food business.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was apparent to numerous people that there was a big effect at the end of this chain (e.g., hoarding doing supermarkets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for which the effect is less clear. It’s thus imperative that you determine how effectively the food supply chain as a whole is actually equipped to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand within retail up, in food service down It’s evident and widely known that demand in the foodservice channels went down due to the closure of joints, amongst others. In some instances, sales for suppliers of the food service industry as a result fell to aproximatelly twenty % of the original volume. As an adverse reaction, demand in the list stations went up and remained at a level of aproximatelly 10-20 % higher than before the crisis started.
Products that had to come from abroad had their very own issues. With the shift in desire from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic was required for wearing in buyer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant affect on output activities. In some instances, this even meant the full stop in production (e.g. inside the duck farming industry, which came to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in 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 sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capacity which is restricted during the very first weeks of the problems, and costs which are high for container transport as a consequence. Truck transportation faced various problems. To begin with, there were uncertainties on how transport will be managed for borders, which in the end were not as rigid as feared. That which was problematic in instances which are many, however, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary components of supply chain resilience:
To us this framework for the evaluation of the interview, the conclusions indicate that few organizations had been well prepared for the corona problems and in fact mainly applied responsive methods. The most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as versatility. This appears particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do it.
Next, it was discovered that more interest was required on spreading danger and also aiming for risk reduction in the supply chain. For the future, meaning more attention should be provided to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in situations in which demand can’t be met. Explicit prioritization is needed to keep on to meet market expectations but also to improve market shares where competitors miss opportunities. This particular challenge isn’t new, though it’s in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona problems teaches us that the economic result of a crisis in addition is determined by the way cooperation in the chain is set up. It is typically unclear exactly how further costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain operates are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally change the traditional discussions between production and logistics on the one hand and advertising on the other, the future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?