Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been completely touched in one way or even yet another. One of the industries in which it was clearly visible is the farming and food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to many folks that there was a great impact at the end of the chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that will the effect is much less clear. It is therefore vital that you determine how effectively the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and 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 examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, contained food service down It’s apparent and popular that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few instances, sales for suppliers of the food service business as a result fell to about 20 % of the initial volume. Being a side effect, demand in the retail stations went up and remained at a level of about 10 20 % greater than before the crisis began.
Products which had to come via abroad had their very own issues. With the shift in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic material was needed for wearing in buyer packaging. As more of this product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a major effect on production activities. In certain cases, this even meant the full stop of production (e.g. in the duck farming business, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other cases, a major portion 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 of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability which is limited during the first weeks of the problems, and costs which are high for container transport as a consequence. Truck transport encountered various problems. At first, there were uncertainties about how transport will be managed at borders, which in the end weren’t as rigid as feared. The thing that was problematic in situations that are many , nevertheless, was the availability of motorists.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this primary elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions show that few organizations had been nicely prepared for the corona problems and in reality mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. 8 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 companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capability to do so.
Next, it was observed that more attention was necessary on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, this means far more attention has to be provided to the way businesses depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to increase market shares where competitors miss options. This particular challenge isn’t new, although it has additionally been underexposed in this problems and was often not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic impact of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It’s often unclear how extra costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the classic discussions between production and logistics on the one hand and marketing and advertising on the other hand, the future must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?