Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched inside a way or another. One of the industries in which this was clearly apparent will be the farming and food industry.
Throughout 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per 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 exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to most people that there was a big effect at the tail end of the chain (e.g., hoarding around supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the source chain for that will the impact is less clear. It is thus important to determine how well the food supply chain as a whole is armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, contained food service down It’s apparent and popular that need in the foodservice channels went down on account of the closure of places, amongst others. In some cases, sales for vendors in the food service business as a result fell to aproximatelly 20 % of the initial volume. Being a complication, demand in the retail stations went up and remained at a degree of aproximatelly 10 20 % greater than before the crisis started.
Products which had to come via abroad had the own problems of theirs. With the shift in demand from foodservice to retail, the demand for packaging improved considerably, More tin, glass or plastic material was needed for use in consumer packaging. As much more of this packaging material ended up in consumers’ houses instead of in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a big impact on production activities. In certain instances, this even meant a total stop of output (e.g. within the duck farming industry, which emerged to a standstill due to demand fall out on the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability that is restricted throughout the first weeks of the issues, and expenses which are high for container transport as a result. Truck travel encountered different issues. Initially, 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 which are most, nevertheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the main elements of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions show that not many companies had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This appears especially complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to do it.
Next, it was discovered that much more attention was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases in which need cannot be met. Explicit prioritization is required to continue to satisfy market expectations but also to improve market shares in which competitors miss opportunities. This particular task is not new, although it’s additionally been underexposed in this problems and was often not part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is usually unclear how additional costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as advertising and marketing on the other, the future will have to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?