Supply chain – The COVID 19 pandemic has definitely had its impact influence on the planet. health and Economic indicators have been compromised and all industries are touched inside a way or even some other. One of the industries in which this was clearly obvious will be the farming and food business.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to a lot of men and women that there was a great impact at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for that the impact is less clear. It is therefore imperative that you find out how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Need within retail up, contained food service down It is apparent and popular that need in the foodservice stations went down as a result of the closure of places, amongst others. In certain instances, sales for vendors of the food service business therefore fell to aproximatelly twenty % of the first volume. As a side effect, demand in the retail stations went up and remained within a quality of about 10-20 % greater than before the problems began.
Products which had to come via abroad had their very own issues. With the change in demand coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was needed for wearing in customer packaging. As more of this product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a major impact on production activities. In a few cases, this even meant a complete stop of output (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity that is restricted during the earliest weeks of the problems, and expenses that are high for container transport as a consequence. Truck transportation experienced different issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the end were not as strict as feared. What was problematic in instances that are a large number of , nevertheless, was the availability of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main components of supply chain resilience:
To us this particular framework for the assessment of the interview, the results show that few businesses were nicely prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems especially complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capacity to do so.
Second, it was observed that more attention was required on spreading risk and also aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be given to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is actually required to continue to meet market expectations but also to boost market shares where competitors miss options. This particular task isn’t new, but it’s also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic effect of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s usually unclear how further expenses (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally replace the traditional discussions between logistics and production on the one hand and advertising on the other hand, the future must explain to.
How is the Dutch foods supply chain coping during the corona crisis?