Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been touched inside a way or even another. Among the industries in which this was clearly apparent will be the farming as well as food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same 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 many stakeholders are impacted. Though it was clear to most individuals that there was a significant impact at the tail end of this chain (e.g., hoarding doing food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for that the effect is less clear. It is therefore important to determine how properly the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as out of 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 examination of theirs on interviews with about thirty Dutch supply chain actors.
Need within retail up, in food service down It’s obvious and popular that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for vendors in the food service business as a result fell to about twenty % of the initial volume. Being a side effect, demand in the retail channels went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis started.
Products that had to come via abroad had their own issues. With the shift in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic material was required for wearing in consumer packaging. As much more of this product packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important impact on production activities. In certain cases, this even meant a total stop of production (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall out on the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capability which is restricted during the earliest weeks of the problems, and expenses which are high for container transport as a consequence. Truck transportation faced different issues. At first, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as rigid as feared. That which was problematic in cases that are many , nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of the primary elements of supply chain resilience:
Using this particular framework for the analysis of the interviews, the conclusions indicate that few companies were nicely prepared for the corona crisis and actually mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to develop the supply chain for agility as well as flexibility. This seems particularly challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to do it.
Next, it was discovered that much more attention was needed on spreading threat and also aiming for risk reduction inside the supply chain. For the future, meaning far more attention has to be provided to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations in which demand cannot be met. Explicit prioritization is needed to continue to meet market expectations but also to boost market shares wherein competitors miss options. This challenge isn’t new, but it’s also been underexposed in this specific crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial impact of a crisis in addition relies on the manner in which cooperation in the chain is set up. It’s usually unclear exactly how additional costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain functions are in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the classic discussions between generation and logistics on the one hand as well as marketing on the other, the future will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?