Supply chain – The COVID 19 pandemic has certainly had its impact effect on the planet. Economic indicators and health have been affected and all industries have been completely touched inside a way or even yet another. Among the industries in which it was clearly noticeable will be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as many stakeholders are affected. Even though it was clear to a lot of men and women that there was a significant effect at the tail end of this chain (e.g., hoarding around supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for that will the impact is less clear. It’s therefore vital that you determine how properly the food supply chain as a whole is equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, found food service down It’s evident and well known that need in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for vendors in the food service industry therefore fell to about 20 % of the initial volume. Being a complication, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % higher than before the problems started.
Goods that had to come from abroad had their own issues. With the change in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass or plastic material was necessary for use in consumer packaging. As more of this particular packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a big impact on production activities. In certain instances, this even meant a full stop of production (e.g. in the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other instances, a big portion 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 pretty shortly in 2020. This resulted in transport electrical capacity that is limited during the earliest weeks of the crisis, and high expenses for container transport as a direct result. Truck transport encountered various problems. At first, there were uncertainties regarding how transport will be handled at borders, which in the long run weren’t as strict as feared. That which was problematic in instances which are a large number of, nonetheless, was the availability of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this main components of supply chain resilience:
Using this particular framework for the evaluation of the interview, the results indicate that not many businesses were well prepared for the corona problems and in reality mostly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to accomplish that.
Second, it was found that much more attention was needed on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, meaning far more attention has to be provided to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in situations where need can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to boost market shares wherein competitors miss opportunities. This challenge is not new, though it’s additionally been underexposed in this specific crisis and was often not a part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the economic impact of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear how further expenses (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the classic discussions between production and logistics on the one hand and marketing and advertising on the other hand, the long term will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?