Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the world. health and Economic indicators have been affected and all industries are touched within one of the ways or some other. Among the industries in which this was clearly noticeable would be the farming and food industry.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to a lot of individuals that there was a huge effect at the end of the chain (e.g., hoarding in grocery stores, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the supply chain for which the effect is less clear. It is therefore imperative that you determine how effectively the food supply chain as a whole is actually armed to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with around 30 Dutch source chain actors.
Need in retail up, that is found food service down It is obvious and widely known that demand in the foodservice stations went down due to the closure of joints, amongst others. In a few cases, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the original volume. Being a side effect, demand in the retail stations went up and remained within a quality of about 10 20 % higher than before the problems started.
Goods that had to come from abroad had the own problems of theirs. With the shift in need coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was necessary for use in buyer packaging. As more of this packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a significant affect on output activities. In certain cases, this even meant a complete stop of output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other situations, a significant part 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 of China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capability that is limited during the very first weeks of the crisis, and high expenses for container transport as a consequence. Truck transportation faced various problems. To begin with, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as rigid as feared. That which was problematic in instances that are a large number of , however, was the availability of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the key elements of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings show that not many companies were nicely prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This looks particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the capability to do it.
Next, it was discovered that more interest was necessary on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means far more attention should be made available to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in cases where demand can’t be met. Explicit prioritization is actually necessary to continue to meet market expectations but in addition to increase market shares wherein competitors miss opportunities. This particular task isn’t new, but it has also been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows us that the monetary effect of a crisis also depends on the way cooperation in the chain is actually set up. It is often unclear how additional costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally change the classic discussions between generation and logistics on the one hand and marketing on the other hand, the long term will have to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?